Zuckerberg faces whopping tax bill
FACEBOOK founder Mark Zuckerberg could fork out more than $1.5bn (£950m) in taxes when the Menlo Park-based company goes public in May.
The S1 form, filed with the SEC last Wednesday, outlined that Zuckerberg intends to exercise his outstanding stock options on shares he was given in 2005 for his role as chief executive, selling enough to cover the tax bill expected to cumulate from the flotation.
In the IPO, Zuckerberg will sell an as-yet undisclosed number of shares – thought to be the first time the 27-year old has sold any of his shares in the social networking site.
He will use “substantially all of the net proceeds” from this transaction to foot the tax bill that will arise from his purchase of 120m shares of the Class B stock at a price of six cents per share.
As this will be taxed as regular income as opposed to capital gains, Zuckerberg is looking at a 35 per cent tax rate.
If the flotation values Facebook at $100bn, Zuckerberg stands to make $6bn, resulting in a tax bill of $2.1bn – one of the largest single tax bills ever.