Facebook Ireland, the Dublin-based company that forms a key part of its global corporate structure, grew its turnover by €737 million last year to €1.78 billion, but only generated an Irish corporation tax charge of €1.9 million.
The company recorded a pre-tax loss of €626,000, according to the accounts, which show how the gross profit made by the company was turned into a loss when administrative expenses, paid to other group companies, were taken into account.
These expenses included royalty payments of €770 million to its immediate parent, Facebook Ireland Holdings, an unlimited company registered in Ireland but not believed to be tax-resident here. Its shareholders include a number of Facebook companies based in the Cayman Islands, where there is no corporation tax.
A request for a comment from Facebook met with no response yesterday.
Strategic operations
The corporate structure used by Facebook mirrors that used by a number of technology giants with important strategic operations in Dublin that are in turn owned by Irish-registered parent companies that receive hundreds of millions of euro in royalty payments annually, but are based in tax havens such as the Cayman Islands or Bermuda.
Accounts filed earlier this year showed Google’s Irish-based operation increased its revenue in 2012 by almost a quarter to €15.5 billion, but after charging administrative expenses of almost €11 billion, including royalties, it paid just €17 million in Irish corporation tax.
Facebook Ireland bills third parties for mostly targeted advertisements to users of the Facebook website.
During 2012 it transferred other aspects of its activity to another Irish company, Facebook Payments International Ltd. That company’s 2012 accounts are not yet available.
The number of staff employed at the Grand Canal Square operation in Dublin grew in 2012 to 382, from 287 in 2011. Staff costs in 2012 were €45.6 million, an increase of about €10 million on the previous year.
The accounts show that during the year the Dublin Facebook company had dealings with Facebook subsidiaries throughout Europe, South and Central America, Australia, Asia, though not China, and the Middle East.
Royalty payments to its immediate parent were €770.6 million, up from €540.9 million in 2011, while management and data services purchased from its ultimate parent were €799 million, up from €375 million in 2011.
