Wednesday, August 27 12:42:03
Twitter, which last year opened up a Spanish subsidiary, will shift income earned in Spain to Ireland, according to a report in El Pais today.
Twitter Spain ended its first fiscal year on December 31 with income of just under E1 million and net profits of E46,772.50, according to the accounts it recently filed with the Madrid Business Register. These accounts also reflect the money that companies provision in a given year for tax on profits, which in Twitter Spain's case is E26,067, El Pais reported.
Twitter Spain has been set up as a company that does not invoice clients directly. This means that its income of E983,331 came not from Spanish clients, but from payments made by other units within the Twitter group. Its activities are limited to marketing, business development, market reports, promotional work and sales support.
Its capital is wholly owned by Twitter International Company, based in Dublin. The Twitter group has two other Irish companies and a Dutch subsidiary, all of which allow Twitter to legally shift profits from countries such as Spain to tax havens, under a system known as the "Dutch sandwich,” in which a company in the Netherlands acts as a stop point between two Irish companies to reduce tax liabilities to a bare minimum.
The group's filings with the US Securities Exchange Commission (SEC) do not break income down by countries. This year, Twitter hopes to earn around $1.3 billion (around E1 billion) and is expecting strong international growth. In the second quarter of 2014, nearly a third of Twitter's income came from outside the United States. Its main foreign market is Britain, El Pais reported.
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