Face­book to chal­lenge hefty US tax

The Myanmar Times - - International Business -

THE US gov­ern­ment is ex­pected to hit Face­book with a bill for be­tween US$3 bil­lion and US$5 bil­lion in back taxes, the so­cial net­work has dis­closed.

Face­book said it would chal­lenge the In­ter­nal Rev­enue Ser­vice (IRS) assess­ment in the US Tax Court when it be­comes fi­nal.

The tax bill re­lates to a pre­vi­ously dis­closed re­view of the pric­ing of as­sets Face­book trans­ferred to its Ir­ish sub­sidiary.

“While the no­tice ap­plies only to the 2010 tax year, the IRS states that it will also ap­ply its po­si­tion for tax years sub­se­quent to 2010, which, if the IRS pre­vails in its po­si­tion, could re­sult in an ad­di­tional fed­eral tax li­a­bil­ity of an es­ti­mated ag­gre­gate amount of ap­prox­i­mately $3 bil­lion to $5 bil­lion, plus in­ter­est and any penal­ties as­serted,” the fil­ing said.

“We do not agree with the po­si­tion of the IRS and will file a pe­ti­tion in the United States Tax Court chal­leng­ing the no­tice.”

The news comes after Face­book re­ported last week a huge quar­terly profit jump, with net in­come leap­ing 186 per­cent from a year ago to $2.05 bil­lion and rev­enues surg­ing 59pc to $6.4 bil­lion.

The IRS rev­e­la­tion is the lat­est high­light­ing tax ques­tions on the global oper­a­tions of tech com­pa­nies.

Euro­pean Union of­fi­cials have looked at the tax li­a­bil­i­ties of com­pa­nies in­clud­ing Google, Ama­zon and Ap­ple. Some of the firms have taken ad­van­tage of tax breaks of­fered from Ire­land, Belgium and Lux­em­bourg.

Ire­land has long been a favourite location for multi­na­tion­als be­cause its 12.5pc cor­po­rate tax rate is the low­est in the 28-na­tion EU. –

Photo: AFP

A videog­ra­pher shoot­ing the side of Face­book’s Like But­ton logo dis­played at the en­trance of the Face­book Head­quar­ters in Menlo Park, Cal­i­for­nia. Face­book faces a bill of be­tween US$3 bil­lion and US$5 bil­lion in back taxes.

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