Twitter taxation in the United Kingdom increased in 2015

Twitter’s taxation in the United Kingdom increased in 2015

Twitter UK increased its tax payments in the United Kingdom from earning up to 30% more than in 2015 although the real figure is estimated to be even higher.

The British Twitter’s branch has paid a total amount of £1.24m (€1.40m) in taxes due to an increasing of its profits up to 30.5% in 2015. These profits reached the amount of £76m  (€83m) although other analysts are pointing out that the real benefits may be up to £135m (€153m).

That feasible gap could be caused by the detour of £60m (€68m) to Ireland, a country with a more generous tax system. This kind of operation is a source of criticism and they brought the British tax authorities to conduct new measures against tax fraud even at its Overseas Territories and Crown Dependencies.

Twitter is not the only multinational that is on the tax authorities’ spotlight both in British and in other European countries and even in the European Union because, recently, other giants like Apple or McDonald’s have been sanctioned by the European Commission because of back taxes. Both multinationals should pay €13bn and €440m respectively to Ireland (in the case of the tech giant) and to Luxembourg (in the case of the famous junk food franchise).

Thus, in the year 2015, Twitter obtained £3.36m in pre-tax profits (€3.82m), a slightly higher figure than the £3.29m pre-tax profits earned in 2014 (€3.74m).

The fight against international tax evasion is facing the dilemma of the legality of many of these optimization processes, with bilateral tax agreements between countries and with prejudice to countries that, as a result, receive less tax revenue than should.

International action on them, such as the OECD BEPS project, sometimes collide with the tax sovereignty of States. Respect for that sovereignty while tax losses of third States are reduced is the field where the fight against international tax fraud moves (and should move).

At Del Canto Chambers we are specialized on tax and trade law and we can be contacted at clerk@delcantochambers.com

Del Canto Chambers’ Editorial Board.

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