Facebook Pays Only $14k Tax

November 30, 2012 New Zealand Taxation

Peter DunneFacebook is avoiding its tax obligations in New Zealand, according to the Labour Party.  

On November 29th the revenues spokesperson David Clark  for the Labour Party issued a statement claiming that the New Zealand arm of Facebook only paid NZD 14 500 in taxes last year, making ” a mockery of Peter Dunne’s refusal to consider closing tax loopholes for multinationals.”

The David Clark explained that “…It appears Facebook is using the ‘double Irish’ tax technique. That’s where it uses Irish Facebook, which pays just 12.5% tax, to determine revenue and expenses. This ensures the company can put most of its revenue through countries with low-tax systems.”

He said that the Minister of Finance Peter Dunne calls this sort of corporate behaviour “legitimate tax avoidance”, while he himself would call it a “rort”.

In response to the David Clark’s accusations the Peter Dunne has announced that he has already ordered an urgent report on the tax affairs of Facebook New Zealand.

The report is expected to be produced next week, after which the Minister will present the matter in Cabinet.

Photo by Tertiary Education Union (NZTEU)