Candy Crush Saga’s London-based developer has become the latest firm to leave the UK in order to allow it to side step the long arm of the British taxman ahead of an imminent initial public offering [IPO].
King Digital Entertainment, which is behind the popular game, has set up a brass-plate office in Ireland, according to The Sunday Times, and it will become the firm’s tax base once it has floated on the New York Stock Exchange.
It has also changed the status of its chief British subsidiary that means following a July reorganisation its sole purpose will be the “provision of management services to other companies” within the King group.
The structures being used by King are completely legal and the likes of Facebook and Google, which have similar schemes in place, haven’t been found guilty of tax avoidance with a public backlash the only negativity to come from the scheme.
King told the same publication that it “complied with all applicable tax regulations in each country” adding “being an Irish company does not affect our tax rate.”
King’s headquarters are in London but the company was in fact founded in Stockholm, Sweden, back in 2002 and last year the firm paid around $146.7 million [£88 million] in corporation tax across the globe, which is equal to 21 per cent of its earnings.
Google’s much publicised tax row in the UK came to a head last May when Eric Schmidt met with UK Prime Minister David Cameron where the company’s corporation tax contributions were discussed following a widespread public outcry.
All eyes will now be on King’s planned IPO on the New York Stock Exchange in a floatation that could value the company at approximately $5 billion [£3 billion] and sceptics are already questioning whether its one hit wonder with Candy Crush Saga can turn into a long term success.