Feb 20, 2020 14:00:00

Facebook is sued by the NTA if Facebook has not paid 1 trillion yen of tax

The United

States Internal Revenue Service (IRS), which is responsible for enforcing and collecting US federal tax, has sued Facebook for a $ 9 billion tax arrears. The IRS claims that Facebook has been tax avoiding between 2010 and 2016.

Facebook faces tax court trial over Ireland offshore deal-Reuters
https://www.reuters.com/article/us-facebook-tax/facebook-faces-tax-court-trial-over-ireland-offshore-deal-idUSKBN20C2CQ

Facebook sued by the IRS for $ 9 billion in unpaid taxes-The Verge
https://www.theverge.com/2020/2/19/21144291/facebook-irs-lawsuit-9-billion-taxes

The tax avoidance measure that Facebook has taken is to record global advertising revenue at a branch office in Ireland where corporate taxes are low. Until 2018, U.S. corporate tax was 35%, while Irish corporate tax was 12.5%, a significant difference in tax rates, and such tax avoidance measures were effective.

Facebook's Irish bureau had an agreement with the US headquarters to 'pay royalties for patented technologies and trademarks.' The IRS has filed a lawsuit because US headquarters sold royalties at unreasonably low prices. Royalty fees from U.S. headquarters are taxable and subject to high U.S. corporate taxes. Therefore, the IRS is suing that the US headquarters has kept royalty fees as low as possible to avoid US corporate taxes.

The IRS claims that Facebook has not paid $ 9 billion in taxes. Facebook estimates that the case will be settled in three to four weeks. Several Facebook executives will also appear in the trial for testimony, including Mike Schroepfer, Head of Technology and Andrew Bosworth, Head of Hardware.

Berti Thomson of Facebook responded to tech media The Verge that the company considers the 2010 deal to be valid. Thomson argued that in 2010 there was no advertising revenue on mobile and what the digital advertising business would be was unknown.

In recent years, similar tax avoidance complaints have been filed. In 2016, the EU ordered Apple to pay an additional tax of 13 billion euros (about 1.6 trillion yen) in response to Apple's tax incentives in Ireland.

What is the background of Apple being ordered to receive 1.6 trillion yen additional tax due to tax incentives in Ireland? -GIGAZINE

by Jinx!

Similar to Apple, it was revealed in 2019 that Google had transferred € 19.9 billion (approximately 2.46 trillion yen) to British Bermuda known as a tax haven.

Google relocates more than 2 trillion yen to tax evasion destination Bermuda in 2017 Photo 1 International News: AFPBB News
https://www.afpbb.com/articles/-/3205140