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Facebook makes a 'mockery' of NZ tax system - Labour

Published: 6:06PM Thursday November 29, 2012 Source: ONE News

Labour claims Facebook is making a mockery of the New Zealand tax system by taking care of its finances in low tax jurisdictions overseas.

Revenue spokesperson David Clark said Facebook, which has 2.2 million Kiwi users, paid $14,497 tax last year, and $5,238 the year before 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.

"Peter Dunne calls that 'legitimate tax avoidance'. I call it a rort."

Clark said search engine Google also uses a similar system to manage its tax returns.

"That company paid just $109,038 tax on $4,447,898 in revenue. That's 2%, way below our 28% corporate rate".

Clark said New Zealand is building a reputation for its attitude to tax avoidance, but the Government is doing nothing about it.

"Australia is bringing in laws to clamp down on this sort of behaviour, as are the Europeans," he said.