The 21st century ‘Big Brother’ so far has been Google and to a large extent it still is, but the dominant social media site Facebook is rapidly catching up to overtake it. The amount of information Facebook collects about users and their likes (pun intended) is enormous and naturally it’s all information available to be sold to advertisers. The standard adage is, “If it’s free, then you are the product being sold.”
The revenue by Facebook’s NZ subsidiary Facebook New Zealand Limited reported in the year ended 31 December 2014 was $1.2 million, quite small in the scheme of things, but that is sure to rise steadily and substantially.
It’s good that John Key has told one of these business moguls to pay their fair share; whether they will is another matter, of course.
According to the NZ Herald:
“New Zealand is among 96 countries that are working on a multilateral tax treaty developed by the OECD to tackle tax avoidance strategies used by multinational companies, that are known by the acronym for base erosion and profit shifting (BEPS).
“A Herald investigation in March found the 20 multinational companies most aggressive in shifting profits out of New Zealand collectively paid virtually no income tax.
“The companies in question, including Facebook, Google and Pfizer, said they followed New Zealand laws and differences in profitability between their New Zealand operations and elsewhere were the results of different business models.
“Facebook paid just $43,000 tax in New Zealand on $1 million in revenue, according to recent financial statements.”