Accounts filed by Facebook Ireland this week show that the social media giant funneled £440m into an Irish sister company in 2011, which then shifted the money into a subsidiary in the Cayman Islands.
The move forms part of a complex tax structure known as a "Double Irish", where large royalty payments are moved from international subsidiaries in order to pay tax in low rate regimes, usually based offshore.
Facebook pushes most of its overseas revenues through Ireland, which now accounts for around 40pc of its global revenue. This has enabled it to legally sidestep payments to higher tax states such as Britain.
The company's Irish operation paid only €3.23m (£2.63m) in corporation tax last year, even as revenues more than quadrupled from €229m to €1.051bn during 2011.
Despite that, the firm slumped to a loss of €18m. In 2010, Facebook recorded a €1.8m profit.
Chancellor George Osborne vowed in his Autumn Statement to get tough on corporate tax avoidance and ensure multinational companies "pay their proper share of taxes".
Accounts filed in October showed that the social media giant paid a UK corporate tax bill of just over £238,000 last year, despite estimated revenues in Britain of £175m. The amount represents less than 1pc of its 2011 revenues.
The row over the amount of tax multinationals pay has seen Starbucks bow to pressure over its tax structure. The coffee chain has agreed to pay around £20m to HMRC in corporation tax over the next two years, regardless of whether it makes a profit.
However, Google chairman Eric Schmidt remained defiant after it emerged that company funnelled $9.8bn (£6.07bn) of revenues from international subsidiaries into Bermuda last year in order to halve its tax bill.
Mr Schmidt insisted that he was "very proud" of the company's tax structure, and said that measures to lower its payments were just "capitalism".
A Facebook spokesman said that the company "complies with all relevant corporate regulations, including those related to filing company reports and taxation."
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