Recently Facebook was accused of indulging in creative accounting to save taxes in the UK. The company actually paid a mere £196K in taxes to the British government last year on reported revenue of £20.4m. The analyst expectation for the period was a revenue of £175m. How did the company have such lower revenue compared to the expectation. As the company has headquarters in Dublin (Ireland has lower tax rates than UK), the company moved the numbers to take advantage of the lower tax rates. Creative accounting or cookie jar accounting?
