Facebook Paid No Corporation Tax in UK for Second Straight Year

Social networking giant Facebook has paid no corporation tax in the UK for the second straight year, despite witnessing a significant increase in revenues generated in the country.

The Independent, citing research firm eMarketer, reported that the company's London operation in Euston is estimated to have generated £371m ($599m, €469m) in revenues last year, up from £223m ($358m, €281m) a year earlier.

Nevertheless, the company showed UK revenues of £49.8m and pre-tax loss of £11.6m in its latest accounts. That was because Facebook processes much of its British sales in Ireland, which has a low tax rate.

The social media booked a tax charge of £3,200 and ended up receiving a credit of £182,000 because of adjustments for prior years.

Meanwhile, the company pleased its London staff with free share awards, as they collected more than 1.5 million free shares currently worth about £74m ($119m, €93m). In addition, employees are due to receive a further 2.2 million Facebook shares, worth about £105m ($168, €132).

In a response, Facebook told the newspaper that it always pays tax according to the laws of each country.

Tax avoidance by multinational companies has become a serious issue in the UK, leading to public protests and open criticism by country leaders. Companies such as Amazon, Google and Starbucks have faced a backlash from politicians and customers over their complex tax arrangements.

The tax avoidance case of Facebook comes after Chancellor George Osborne warned last month: "Some technology companies go to extraordinary lengths to pay little or no tax here."

Osborne has subsequently promised a change in the UK tax code to crack down on offshore tax avoidance.