An Irish subsidiary of social media network Linkedin paid no corporation tax last year despite posting a profit of almost £70m.
Accounts filed for Linkedin Technology revealed the company pulled in profit of $86.7m (£67.1m) in 2018, a huge increase on the $10m posted the year before.
The sharp increase, first reported by the Times, was driven by the sale of Linkedin’s intellectual property (IP) to Microsoft after its $26bn takeover in 2016.
Linkedin’s other principle Irish subsidiary, Linkedin Ireland, posted a profit of $2.7bn in 2017 due to the IP handover.
Despite its hefty profit, Linkedin Technology paid no corporation tax for 2018. A note in its accounts stated: “As the company is Isle of Man tax resident, accordingly the company is subject to the Isle of Man income tax at a rate of 0 per cent on any profits made.”
Similarly, Linkedin Ireland paid just $127m in corporation tax on its profit for 2017, well below the standard rate of 12.5 per cent, as the majority of its profit was not liable for income tax.
Tech giants such as Google, Amazon and Facebook have faced criticism amid concerns they are dodging corporate taxes by booking profit in low-tax jurisdictions such as Ireland.
In October the Organisation for Economic Cooperation and Development laid out proposals for a shake-up of the tax regime to enable governments to levy tax on cross-border companies based on income from sales in their countries.
Linkedin’s filings showed it employed 1,300 people in Ireland last year, while it expected its operations in the country to expand to support revenue growth.
A Linkedin spokesperson said: “Linkedin pays all the taxes we’re due to pay, in all the markets that we operate, including Ireland.
“Last year in Ireland, Linkedin paid $16m in tax, which represents an effective tax rate of 20 per cent. In addition, Linkedin makes a substantial contribution to the Irish economy having invested significantly in the development of our EMEA headquarters in Dublin.”