Facebook Paid No Taxes Despite $1 Billion Profit

The largest Internet IPO in history, roughly $1 billion profit, and lots of new developments – the year of 2012 was a big one for Facebook. Yeah, I know the IPO was a mess, you probably find no use for Facebook’s graph search, there was the Instagram privacy debacle and all, but don’t forget the social network managed to generate roughly $1 billion profit last year. And, the Federal Tax laws have made it sweeter for Facebook.


Facebook won’t have to pay a dime as taxes, despite its huge profit. Instead the social network will get a $429 million refund for the 2012 fiscal year. Fox News reported that the company will continue to receive huge tax breaks, totaling about $3 billion, in coming years.

The huge tax breaks are possible due to the employee pay out policy of Facebook. Employees are paid through stock options, which don’t cost the company a nickel. But the government considers it as wages; hence, Facebook get a deduction for it. Robert McIntyre of watchdog group Citizens for Tax Justice explained the process to Fox News in an interview.

Thanks to: Fox News

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