Published: Wed, December 13, 2017
Markets | By Erika Turner

Facebook to reduce level of advert sales it books in Ireland

Facebook to reduce level of advert sales it books in Ireland

The company is expected to start paying tax on its local operations across roughly 30 jurisdictions outside the United States including France, Germany and eight other European Union countries where Facebook has local offices.

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.

Facebook today said it is shifting to a "local selling structure" in countries outside the USA, in which its advertising revenue in that country will be recorded by their local company in the country.

Last year, it diverted €12.6 billion of revenues to Ireland, attracting €29.5 million of Irish tax, but also the ire of other governments who argue multinationals must stop sending sales here, and instead book them where they are earned. Facebook started billing customers in the United Kingdom from its local subsidiary, rather than through Ireland, a move that resulted in an increased tax bill for the company in the UK.

The change will apply to countries where the social network has dedicated offices.

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Mr Coffey said the move by Facebook may be pre-empting changes many expect to kick in under the OECD-led effort to address what's called base erosion and profit shifting (Beps), structures that help large companies shift money around to reduce tax bills.

Facebook's revamp of its global tax practices comes roughly a week before US lawmakers hope to complete a significant overhaul of the country's tax system, which may impose a low, one-time tax on profits that USA multinationals have amassed overseas.

"This is a large undertaking that will require significant resources to implement around the world", added Wehner. "We will roll out new systems and invoicing as quickly as possible to ensure a seamless transition to our new structure", he said.

The European Commission is looking for ways to collect more tax from tech companies, which pay less than half the taxes of brick-and-mortar businesses, according to a report published by the commission in September.

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