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Snap, the US parent company of messaging app Snapchat, has chosen to establish its non-US base in London, in an endorsement of the UK's tax environment, despite the UK's decision to leave the European Union.
Snap said on January 10: "Today, the media reported that we selected London as our International HQ. That is not true. We have one HQ, in Venice, and many offices throughout the world. We did, however, make a change to the way we operate our business in London. Going forward, we will bill our advertising revenue from the UK (and a few other countries) through a UK entity. This allows us to pay taxes in the UK, which we believe is part of being a good local partner as we grow our business."
"We want to pay taxes in the countries where we sell advertising, and this is an important step in building the infrastructure to achieve that goal."
The move comes amid the European Commission's increased scrutiny of multinationals' tax affairs, with technology companies in particular under scrutiny for their transfer pricing affairs. A particular point of contention is where they book revenues from intangible assets.
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