Snapchat sets up international office in London

Snapchat logo Image copyright Getty Images

Snap, the company behind messaging app Snapchat, says it has established its non-US office in London.

It will pay taxes on UK and some international sales through the hub.

The move is unusual for a US technology company, many of which set up international headquarters in Ireland or other European countries due to tax breaks.

However, the European Commission has been cracking down on some of the tech companies' tax deals.

In addition, the OECD has has been pushing for G20 measures on corporate tax avoidance.

Claire Valoti, general manager of Snap Group in the UK, said: "We believe in the UK creative industries. The UK is where our advertising clients are, where more than 10 million daily Snapchatters are, and where we've already begun to hire talent."

The messaging app parent company already had a UK office in London, but as of Tuesday, the office will operate as its international hub.

Revenue from sales made to UK customers will be booked in the UK. Sales staff in the UK will also handle clients in countries outside the US which do not have a Snap sales force, and those revenues will also be recorded in the UK.

Image copyright Getty Images

Analysis: Rory Cellan-Jones, BBC technology correspondent

It's a great boost for London's global reputation as a hub for creative industries - but the economic impact of Snap Inc's decision to base its international hub in the UK may be limited.

At the moment, the firm's UK workforce is just 75 strong, and although that will expand, it's hardly the equivalent of a car plant in Sunderland - though baristas in Soho will be grateful for the opportunity to sell a lot more decaf skinny lattes.

But this does signal that post Brexit London, with its skilled workforce, its strength in advertising and its relatively low tax rates will remain a very attractive location for tech firms, especially those that aren't moving physical goods across borders.

And, as the EU cracks down on sweetheart tax deals in Ireland and Luxembourg, the UK may look even more attractive.

But there is one clear message from today's announcement - it really is time for ageing technology correspondents to get to grips with how Snapchat works.

The messaging app has been expanding its London operations, growing its office in the city from around six staff last year to more than 75.

The company says it has 150 million daily active users around the world, with 50 million in Europe.

Many US technology companies, including Apple, Facebook, Google, and Twitter, have set up international headquarters in countries with lower corporate tax rates than the UK, such as Ireland.

However, a number of authorities, including the European Commission, have been investigating those deals.

In August last year, the European Commission said that Apple should pay Ireland €13bn (£11bn) in back taxes, a ruling Apple is appealing against.

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