Facebook to pay taxes in country where advertising profits are earned instead of via Dublin HQ

Facebook has said it will no longer record its non-US revenue through Ireland in a major change to where it pays tax.

Facebook to pay taxes in country where advertising profits are earned instead of via Dublin HQ

Facebook has said it will no longer record its non-US revenue through Ireland in a major change to where it pays tax.

From next year taxes will be paid in the country where advertising profits are earned.

Revenue will be filed under the local company in the country where it is earned outside the US, chief financial officer Dave Wehner said.

The tech giant's move follows pressure on large multinationals over their tax affairs from governments and the public.

Mr Wehner said: "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."

He said Facebook has decided to move to a local selling structure in countries where it has an office to support sales to local advertisers.

"In simple terms, this means that advertising revenue supported by our local teams will no longer be recorded by our international headquarters in Dublin, but will instead be recorded by our local company in that country.

"It is our expectation that we will make this change in countries where we have a local office supporting advertisers in that country.

"That said, each country is unique, and we want to make sure we get this change right.

"This is a large undertaking that will require significant resources to implement around the world.

"We will roll out new systems and invoicing as quickly as possible to ensure a seamless transition to our new structure. We plan to implement this change throughout 2018, with the goal of completing all offices by the first half of 2019."

Ireland has a corporation tax rate of 12.5% for trading income, much lower than the US or UK.

It has used the rate to attract multinational firms, whose taxes were worth around 80% of the country's corporation tax receipts in recent years.

Facebook was widely criticised after paying just £4,327 in UK corporation tax in 2014, while more than doubling its UK staff share bonus pot to £35.4m.

Corporation tax was charged at 20% on taxable profits, but Facebook's accounts showed a loss of £28.5m for the year in Britain, under an arrangement which treated UK operations revenue as a payment from Facebook Ireland for services.

The total corporation tax bill for the company - which has global profits of more than €1.13bn every three months - amounted to less than a worker on the average wage would pay in income tax and national insurance.

more courts articles

Man (25) in court charged with murdering his father and attempted murder of mother Man (25) in court charged with murdering his father and attempted murder of mother
Man appears in court charged with false imprisonment of woman in van Man appears in court charged with false imprisonment of woman in van
Man in court over alleged false imprisonment of woman Man in court over alleged false imprisonment of woman

More in this section

FILE PHOTO The Competition and Consumer Protection Commission has cleared the purchase of Goodbody Stockbrokers by AIB END Goodbody Stockbrokers fined over €1.2m by Central Bank over rules breaches
Nottingham City Centre Stock Irish staff at the Body Shop wait for wages as retailer shuts stores in the Republic
Ryanair comments on Norwegian Ryanair boss O'Leary's spat with Transport Minister over Dublin Airport escalates
IE logo
Devices


UNLIMITED ACCESS TO THE IRISH EXAMINER FOR TEAMS AND ORGANISATIONS
FIND OUT MORE

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
ie logo
Puzzles Logo

Play digital puzzles like crosswords, sudoku and a variety of word games including the popular Word Wheel

Lunchtime News
Newsletter

Keep up with the stories of the day with our lunchtime news wrap.

Sign up
Cookie Policy Privacy Policy Brand Safety FAQ Help Contact Us Terms and Conditions

© Examiner Echo Group Limited