This newspaper’s report on Thursday highlighting
the vast chasm between Facebook Ireland Ltd’s €1.7 billion turnover in
2012 and its €1.9 million Irish corporation tax charge was picked up by
the Financial Times yesterday, after which it went "viral” on the internet.
From the news sites of Forbes to the Guardian, the Daily Mail to Bloomberg,
the interest and associated commentary were huge. Which is not
surprising when you look at the figures in the latest annual return
filed by Facebook Inc to the Securities and Exchange Commission in the
By the end of 2012, the technology behemoth
had 1.06 billion monthly active users, up 25 per cent on the position at
the end of 2011, and 618 million daily active users, up 28 per cent on
the end of 2011. On average, according to the filing, 350 million
photographs were uploaded to Facebook every day during the last quarter
of 2012, and 240 billion photographs had been shared on the platform by
the year’s end.
Given that sort of public engagement with
the company, and the ongoing controversy over the taxation of
multinationals, media businesses were quick to spot a story of general,
and global, interest. Some commentators were quick to suggest that
Ireland should do something to close down the tax-avoidance strategies
that are used by Microsoft, Google and Facebook, by way of subsidiaries
registered here – for the most part missing the point that the United
States, home to all of these companies, could change its laws to bring
an end to the tax schemes.
Of course, given its
nature, the most logical way to approach the issue is by way of
international co-operation, which is exactly what seems to be happening
by way of the Organisation for Economic Co-operation and Development and
its project to tackle tax-base erosion.
in its US filing, noted the potential for its affairs to be affected by
changes to US tax law, or those of other jurisdictions. As they put it,
the US and other countries "are considering changes to their tax
regimes in an effort to raise additional tax proceeds from companies
such as Facebook”.
Ireland is the most important
country in Facebook’s tax affairs after the US. Global revenue for 2012
was $5 billion, so Facebook Ireland’s €1.7 billion is a big part of its
overall book. Given Ireland’s 12.5 per cent corporation tax rate, any
OECD measure introduced to combat base erosion has the potential, if it
goes our way, to see Ireland get a bigger chunk of the Facebook pie. Not
to mention those of Microsoft, Google, and others.
Patching up pharma relationships
Elan put itself on the market after its bruising battle with Royalty
Pharma, US over-the-counter medicines group Perrigo seemed to appear out
of nowhere to offer the company an alternative and more profitable exit
from independent existence.
But Perrigo was not
unknown to Elan. In fact, the companies’ connections go back 15 years
and involve the product for which Elan first made a name for itself –
the nicotine patch.
The patch was the brainchild
of Elan founder Don Panoz, and was the reason for his establishment of a
drug-delivery business in Athlone when he first arrived in the country
to found Elan.
Initially the patch was a
prescription product but, in 1999, Elan and its US partner, a then
unheralded company called Perrigo, announced they had secured FDA
approval to change the status of the patch to an over-the-counter
product. And Perrigo secured the rights to market and distribute the
patch in the US. The Elan executive behind the move was one Seamus
Mulligan, then president of Elan Pharmaceutical Technologies.
This article first appeared in irishtimes.com.