January 11, 2017

Los Angeles Times quotes Friedemann Thomma on Snapchat’s move to route overseas revenue through London

1 min

Venable partner Friedemann Thomma was quoted in a January 11, 2017, Los Angeles Times article on Snapchat's announcement that it plans to route much of its overseas revenue through London. Under the plan, the company will continue to pay local taxes in countries where it has branches, including the United States, but revenue generated in other countries will be processed through its new London office. Recently, London has taken steps to reduce its corporate tax rate in the coming years making it an attractive option for business. The reduced rates make London a comparable option to countries viewed as tax havens while avoiding much of the negative publicity some companies have faced with similar moves.

Thomma said Snapchat's plan is part of a trend among tech companies looking to align their tax strategies with business operations instead of forming a creative web of subsidiaries. "There's a balancing act between tax savings, public scrutiny, and public perception," he said. "All three will have a direct result on your market cap, and Snap is taking advantage of those dynamics."