Facebook New Zealand has come under fire after only paying $14,500 tax last year, making a mockery of tax loopholes for multinationals according to Labour.
The party's revenue spokesperson David Clark believes the social media giant is exploiting Revenue Minister Peter Dunne's refusal to close tax loopholes and believes action is needed to combat such tiny tax bills.
“The New Zealand arm of the world’s most used online social networking tool, Facebook, paid only $14,497 in tax last year," Clark said.
“In 2010 its tax bill was a mere $5,238. For a company that has 2.2 million users in New Zealand and makes billions worldwide, that’s barely believable.
“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.
“Peter Dunne calls that ‘legitimate tax avoidance’. I call it a rort.
“Australia is bringing in laws to clamp down on this sort of behaviour, as are the Europeans. Yet here the Government isn’t even considering it.
“Peter Dunne doesn’t realise that New Zealand is beginning to get a reputation as something of a see-no-evil tax haven.
"Recent reports from the Guardian newspaper and BBC Panorama put New Zealand in the company of the Channel Islands and Nevis. Not good company.
“It’s not just Facebook that funnels revenue through its low-tax Irish counterpart. Google New Zealand does it too. That company paid just $109,038 tax on $4,447,898 in revenue. That’s two per cent, way below our 28 per cent corporate rate.
“These companies should pay the right amount of tax here. That’s only fair. For Peter Dunne to wash his hands of the issue is simply not good enough.
"We must work with Australia to ensure this sort of tax avoidance is stamped out.”
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