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Facebook changes tax structure to start billing ad sales locally

Facebook changes tax structure to start billing ad sales locally

Facebook has since come under pressure from the United States and Europe for its tax practices.

Revenues from SMEs and individuals outside of the U.S. will still be booked through Facebook here in Ireland.

"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", Mr Wehner said.

Facebook already has its main headquarters in California, and now has offices in dozens of countries across Europe, Asia, the Middle East, and Latin & South America.

Facebook expects to make the change in countries where it has a local office, although Wehner added that "each country is unique".

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




The changes will be implemented throughout 2018, with a view to them being completed by the first half of 2019.

The move will affect how Facebook pays taxes in 30 countries including Germany, France, Spain, Italy, the Netherlands, Belgium, Norway, Poland, and Sweden.

In 2015, the United Kingdom government introduced a "diverted profits" tax, a higher rate of corporation tax aimed at companies that move profits out of the country.

The move echoes Facebook's March 2016 decision to stop booking its United Kingdom advertising sales through Ireland and instead pay tax on those sales in the UK.

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.

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