Twitter Takes On Tax Expert To Avoid Woes
Twitter is bolstering its international operations ahead of an expected flotation by employing its first full-time tax manager, to ensure complex company structures comply with laws across Europe.
Based in its international headquarters in Dublin, it will include oversight of the preparation and filing of all business tax returns.
The social media giant described the new role as being “in a fast-moving, challenging yet fun environment”.
Sky News understands Twitter is hiring a number of new key finance personnel as part of its extensive international expansion plan.
The tax manager will be responsible for taxation affairs across Europe, the Middle East and Africa (EMEA) and is expected to “implement and monitor transfer pricing strategy”.
Transfer pricing is a system whereby goods or services are supplied and charged between arms of a multinational firm, sometimes across national borders and jurisdictions.
Twitter UK Ltd answers to Twitter International Company in Ireland, which is wholly-owned by Twitter Inc – one of at least three companies California-based Twitter has formed in the US state of Delaware.
However, leading American multinationals have been under increasing UK parliamentary scrutiny in recent months over transfer pricing.
Last week the UK arm of Twitter filed its abbreviated accounts for the year ended December 31, with the business regulator Companies House.
Twitter declined to confirm that UK sales were routed through Ireland.
But its accounts revealed that “turnover represents the value of services provided to other Twitter group companies”.
A Twitter UK spokesperson told Sky News: “Since Twitter UK opened in 2011 we have been steadily building our team, focusing on promoting great uses of Twitter by all elements of UK society – the arts, sport, Government, and brand partners.”
UK profit for 2012 was listed as £108,907, up from £16,499 in the previous year. Twitter UK was formed in June 2011.
The company’s taxation and social security liability also increased from £36,800 in 2011 to £326,949 in 2012.
“There have been a number of significant changes and you can see the company’s tangible assets in the 2012 accounts have substantially increased to £504,595 from £2,696 in 2011,” Maung Aye, corporate solicitor and Mackrell Turner Garrettassociate, told.
“Another factor to consider is whether the assets and equipment of the now dissolved TweetDeck Ltd were absorbed into Twitter UK Ltd so that the application can be continued for its users.”
Last December Sky News revealed that Twitter UK and its sister firm TweetDeck Ltd were fined by Companies House for failing to file their 2011 accounts on time.
Two of Twitter’s top American officials, chief executive Dick Costolo and head of trust Alex Macgillivray, were directors of the TweetDeck. The two executives, along with chief operating officer Ali Rowghani, were directors of Twitter UK.
Although Twitter UK finally filed its 2011 accounts TweetDeck did not and was forcibly dissolved by the business regulator on May 7 this year.
On May 9, Mr Costolo resigned his remaining British directorial role – with Twitter UK – and his position was taken by Irish ex-‘Big Four’ chartered accountant Laurence O’Brien, who is in charge of international operations in Dublin.
Forbes magazine has reported that Twitter may seek a public flotation in 2014, saying it could be worth more than $11bn (£6.8bn) to investors if it successfully monetises the service without disenfranchising users.
Meanwhile, the micro-blogging site has fought against spam attacks masquerading as legitimate tweets.
In January, hashtags for the World Economic Forum in Davos were bombarded with so-called spam bots and porn bots, while a recent swamping involved diet aid spams.
In both cases Mr Costolo responded to complaints personally by tweeting that the company was dealing with the problems.