Facebook to reduce level of advert sales it books in Ireland

Michele Moreno
December 15, 2017

Currently, Facebook lumps its non-U.S.ad revenue into a single report through its worldwide headquarters in Dublin, Ireland, but starting next year, the social media giant will begin reporting ad revenue locally in countries where it has an office.

This moves comes after significant pressure and scrutiny from the US and Europe for its tax practices.

The company's worldwide HQ will remain in Dublin and the USA headquarters will continue to be in Menlo Park, CA.

Wehner said Facebook expects the change will be made in countries where it already has offices, but noted that each country is unique so it may take some time for new systems and invoicing protocols to be set up "to ensure a seamless transition to our new structure".

Facebook has said they will be decreasing Ireland's tax bill when they move to paying taxes on revenue in countries they're earned in, such as Germany and France.

Moving to a Local Selling Model | Facebook Newsroom

He described the move as a "large undertaking" that will require significant resources to implement around the world.

The European Commission says its drive to put pressure on digital giants to pay more corporation tax is "having a real impact", following Facebook's decision yesterday to stop booking much of its global revenue in Dublin.

BBC reports that the social media company came under fire after it had paid only £4,327 (€4,900) in the United Kingdom in 2014 - although the tax bill has risen substantially in subsequent years.

The policy change will be implemented throughout 2018 and the news post stated the goal is to complete the shift for all offices by the first half of 2018. Much of the company's earnings are said to be derived from intellectual property, created in the United States but now likely held in Bermuda or another low tax jurisdiction, so deductible royalties will need to be paid to the country holding the IP.

Other reports by Insurance News

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