undergroundnewsroom.com March 21, 2018

Facebook to stop routing ad revenue via Ireland amid pressure over taxes

13 December 2017, 06:10 | Gordon Grant

Moving to a Local Selling Model | Facebook Newsroom

FB To Change its Tax Paying Model

Facebook stressed the changes will have no jobs impact here, where it employs more than 2,000 workers, and that Dublin remains its global headquarters.

"We believe that moving to a local selling structure will provide more transparency to governments and policy makers around the world who have called for greater visibility over the revenue associated with locally supported sales in their countries", Dave Wehner, Facebook's chief financial officer, said in a statement.

The move comes amid a wider focus on the tax paid by multinationals, especially those selling tech services. As a result, advertising revenue generated by its local teams will no longer be recorded in Dublin, but will instead be recorded by its local company in that country.

For years, Facebook has legally minimised taxes by funnelling non-US income to the Republic of Ireland, a jurisdiction with only 12.5 per cent corporation tax.

Last year, the company said it would stop routing United Kingdom sales through Ireland after public outcry over news that Facebook paid only 4,327 pounds ($6,128) in taxes in 2014.

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Facebook will gradually introduce the new reporting structure throughout 2018, and the company expects to have the system fully in place by the first half of 2019.

This will affect its operations in nearly 30 countries where it has a physical presence such as a sales office. The company, however, was criticized for not paying enough tax after its British revenues quadrupled, to £842 million, over the same period.

Not everyone has welcomed the proposals.

Wehner said that this change will "require significant resources" to implement fully since each country has unique laws and expectations.

Despite Facebook's efforts to mollify the growing clamor for tech companies to pay more tax, it remains unclear whether the social network's proposed changes will be enough to stop European Union policymakers from pushing ahead with changes to the region's tax policies.

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