Where is facebook domiciled

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Sign In. Don't have an account? Forgot Password? Not an Irish Times subscriber? While the subsidiary holding the royalties is based in Ireland, its tax domicile is in the Cayman Islands, which is tax-free. In some cases, the royalties are technically held by a third holding company in Holland but funded by the Cayman-Irish business.

A Facebook now says it will account for sales made to big advertisers in the UK through its British company rather than funnelling them over to Ireland. That means it will be paying tax on any profits at the UK corporate tax rate of 20 per cent. Reports have suggested it will be paying millions of pounds more in UK tax than it was, but we will not know until the relevant UK accounts appear. Given that it is not starting the new system until the tax year, we will have to wait until for the accounts.

That means it could still be paying no tax for years to come. A Negative publicity is likely to have played a large part, but Facebook may also have been influenced by new UK rules known as the Diverted Profits Tax. Aimed at big companies using international tax avoidance tricks, this effectively means the taxman can make his own estimate of what their UK profits are based on their sales here.

This so-called Google tax is levied at a higher-than-normal rate of 25 per cent and is one of the first examples in the world of tax being calculated on sales rather than profit. Join thought-provoking conversations, follow other Independent readers and see their replies.

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