Key to Facebook: Pay your taxes

Mark Zuckerberg and John Key at APEC (John Key / Twitter)
Mark Zuckerberg and John Key at APEC (John Key / Twitter)

The Prime Minister has taken on one of the most powerful businessmen in the world - Facebook CEO, Mark Zuckerberg. 

Both are in Peru for the Asia-Pacific Economic Cooperation (APEC) meeting and rubbed shoulders behind closed doors. 

John Key says he raised the issue of Facebook paying its fair share of tax. 

"To be honest with Mark Zuckerberg, I was reasonably blunt - I said that I thought that Facebook did have an issue in terms of its global tax or the perception of its tax policy, and I thought that he needed to change that." 

Mr Key says it wasn't a specific grab for more tax dollars to fly New Zealand's way - it was much bigger than that.

"It wasn't so much about whether they paid their fair share of tax in New Zealand or didn't. Maybe they do and maybe they don't I can't assess that. But I think when the shorthand for the problem with multinationals not paying their tax is Facebook, then I can't see how that's a good thing for Facebook."

And Mr Zuckerberg was apparently quite receptive to the idea - although a bit blindsided by it. 

"I think he was a bit surprised, but I mean I don't think I'm doing him any favours not telling him that." 

Mr Key is well aware that perception is everything, and sounded like he was dishing up some advice to the young entrepreneur. 

"I thought that as a company they've got a PR issue and they really should go away and take away that thinking and think about how they're going to resolve that, or at least demonstrate to the world that they actually do pay their fair share of tax in every location that they operate in.

"It's not about generosity, he's incredibly generous and he should be commended for that, but if I was running Facebook or I was running a multinational in the modern world we live in I'd make sure that most countries or every country felt that tax was being fairly paid.

"And I think that if they don't, eventually the same people who are the users will wake up one day and say, 'Why do I have to pay my tax if this company's not going to?'"

Mr Key warned that if his advice wasn't heeded, Facebook could be on the receiving end of a Trump-like revolt.

"There's a bit of a feeling that would've got Donald Trump elected that somehow the world wasn't quite fair certainly to the people that voted in favour of Trump I think they feel they haven't been treated fairly," he said. 

"I said if I was running a major corporation like Facebook and the perception out there from users over time was that they weren't fair when it came to the tax system, over time that would reflect really badly on the company and there could ultimately be consequences. And they should deal with it."

Mr Zuckerberg was the keynote speaker at today's CEO summit at APEC, and addressed inequality in his speech. 

He said one way to close the gap would be to connect more of the 4 billion people who don't have internet access.