Facebook defends its 'Double Irish' tax reduction deal
Facebook has defended the level of tax it pays in Ireland, saying it complies fully with all relevant regulations.
Accounts for Facebook Ireland Limited, through which most of Facebook's international business runs, show the company more than quadrupled its revenue to €1bn (£0.8bn) last year.
Despite the bump in revenue, however, the company actually recorded a loss for 2011 because it paid most of that revenue as royalties to another company based overseas.
The accounting technique, known as the 'Double Irish', allows companies to move profits abroad without having to pay tax on them because they are counted as a business expense. For the year Facebook Ireland paid €3.23m (£2.6m) in corporation tax.
However, the company vigorously defended its actions, which are completely legal.
"Facebook complies with all relevant corporate regulations including those related to filing company reports and taxation.
"We have our international headquarters in Ireland that employs over 400 people and a series of smaller local offices providing support services all over Europe.''
"Dublin was selected as the best location to hire staff with the right skills to run a multi-lingual hi-tech operation serving the whole of Europe," the spokesman added.
Facebook has brought huge benefits to Dublin in particular since it opened its doors here in 2009.
A study from the consultants Deloitte found its presence in Dublin contributed almost €400m (£326m) to the Irish economy and supported 4,500 jobs indirectly.
The question of how much tax multinationals are paying has become something of a cause celebre throughout Europe and the US in recent weeks.
The coffee chain Starbucks volunteered to pay up to £20m in corporation tax to the Exchequer after it was revealed that the group hadn't made a paper profit in Britain in years.