Leader: Do we care about Facebook’s tax status update?

SO FACEBOOK is on the receiving end of the same stick as Google around how it manages its corporate tax affairs in the UK.

The social media giant has been accused of avoiding tax by diverting UK revenues through more ‘tax-efficient’ jurisdictions.

As ever, the grey area between legal and illegal tax management comes to the fore – Accountancy Age has previously stated that individuals can’t expect a pat on the back where they have skipped lightly through legislation to duck tax. This is ‘beyond the pale’, if you pardon the pun.

But each situation has to be judged on its merits – despite what some might say, the compass doesn’t just consist of three points: ‘fair’, ‘immoral’ and ‘illegal’.

Without knowing the ins and outs of Facebook’s tax strategy, we can assume that it has followed tax law – hopefully law that is quite transparent.

If the government doesn’t like what Facebook, Google et al have done, then do something about it.

It is perhaps a timely reminder that global efforts to halt tax dodging only go so far before countries decide to use tax to entice business onto their shores. Corporation tax cut, anyone?

Kevin Reed is the editor of Accountancy Age and Financial Director

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