Multinational Corporation Taxes

Facebook's Minimal UK Corporate Tax 

Facebook paid less than $7,000.00 in corporate taxes on its $2.9 billion in revenues in 2014 to the UK government. While Facebook's 362 UK employees each paid almost $6,000.00 in income and national insurance benefit tax. The European Union (EU) is investigating Facebook along with other multinational corporations tax arrangements in the UK. Starbucks was the first US corporation under investigation for minimal UK tax paid over a span of 14 years on billions of dollars made in the UK by the company. The investigation has uncovered that Luxembourg has issued many tax rulings which have allowed various multinational corporations to lower their tax bill by "funneling money through the country". Facebook has stated in response that it is in compliance with UK tax laws. The EU investigation will continue but the problems may stem from the UK's complex and extensive tax code which is very similar in complexity to the US Tax code. A simplification of the UK tax code could help to better identify the various tax loopholes used by US based multinational corporations operating in the UK.  If the UK tax code is not amended it may lead to more US corporations moving to the UK or other countries to take advantage of the lenient code system that results in corporate taxes which are less than the average income tax paid by employees of these companies. Further, this code will create greater inefficiencies in the allocation of taxes in the UK. with billion dollar companies paying minimal taxes countries will be unable to afford the toll on resources that results from operation of business in the country. An eventual deterioration of infrastructure, educational systems and government subsidiaries such as housing and employment. Hopefully, the EU investigation will be able to reevaluate the current tax code to avoid these inefficiencies. Read more about Facebook's corporate tax in the UK here: http://www.bbc.com/news/business-34504474