Despite an ongoing US$9 billion court case in the US over tax evasion, the CEO of Facebook Mark Zuckerberg has stated that the social networking company will be willing to pay more taxes outside of the US.
Excerpts from a speech that Zuckerberg was expected to deliver at the Munich Security Conference in Germany this week, suggested that he would call for more regulations for big tech firms such as Facebook and Google.
The call for increased regulations in Europe from Facebook’s founder on everything from taxes to data protection, privacy, and the spreading of false information, seems surprising given recent events. Not only are they still fighting a ten-year legal battle in the US over billions of dollars of unpaid tax, they also had to pay out US$550 million resulting from a case against their collection and storage of millions of user’s biometric data.
The low levels of corporation tax paid by global tech firms has long been a highly controversial topic in Europe, with Facebook only paying £28 million in the UK last year despite revenue of £1.6 billion. Similarly, Google paid only £66.8 million on £1.4 billion of revenue, and Apple paid a tiny £3.8 million on £1.2 billion!
Whilst Zuckerberg’s comments will certainly be welcome to European officials, they are unlikely to be the catalyst for change as sweeping reforms on regulating large tech companies are already very high on the agenda.
THINK LIKE AN ECONOMIST!
Q1. What is meant by the term corporation tax?
Q2. Explain one way that global tech companies are able to avoid paying taxes in some countries?
Q3. Some countries have very low corporation tax rates in order to attract these global tech companies. Analyse the reasons why they would want to do this.
Click here for the source article
