You Probably Paid More Taxes Than Facebook Did in the U.K. Last Year

Did you make $210 million last year? No? Well, Facebook did (in the U.K.).

And guess what? They probably also paid less tax than you.

This latest example of the world being unfair comes after press reports of Facebook’s 2014 corporate tax bill, which amounts to a paltry $8,600. For the whole company.

Britons earning the average salary, meanwhile, would have paid more than $10,000 on their income.

How is this possible, you ask? Through a series of arrangements we regular peasants aren’t privy to, Facebook is allowed to register a significantly lower taxable income when filing its corporate taxes. It moves British revenue through an Irish company, a tax avoidance strategy that some multinational corporations use to lower their corporate tax liability, and also reported a $58 million accounting loss to slash its overall bill.

The definition of “loss,” by the way, is laughably lenient: the company’s 362 UK staff took home an average of $417,000 in pay and bonuses last year, which can be omitted from taxable income. This isn’t the first time that Facebook’s weaseled its way out of paying taxes either. In 2013, when the company first went public and made over $1.4 billion in profits, it employed a similar strategy of dishing out lofty bonuses to benefit from tax deductibility on executive stock options. The deductible was so high from these bonuses that it equalled more than what Facebook owed the federal government and it was actually able to claim a refund.

To repeat: Facebook received a tax refund on $1.4 billion in profit. That is some Frank Abagnale accounting right there.

“Internationally, there are just far too many loopholes and complex arrangements available to corporations,” says Warwick Business School accounting professor Crawford Spence. “This is yet another example of a billion dollar company that makes significant profits in the UK yet somehow fails to pay any meaningful tax on them.”

In response, Facebook offered a simple “We are compliant with UK tax law.” A spokesperson added that Facebook’s British employees paid UK income tax on their salaries, which is nice.