Facebook announces plan to stop diverting some ad revenue through Ireland

15 December, 2017, 01:19 | Author: Gregory Stephens
  • Dave Wehner Facebook’s Financial Director is pleased that the new local sales structure will enable greater transparency desired by governments and legislatures where Facebook generates advertising revenues

"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 in a statement.

Facebook on Tuesday said that it will begin the process of restructuring its non-US operations so that all revenues from larger advertisers will be booked in the countries where the ad was sold, instead of Dublin.

Facebook is to overhaul its tax structure so that it pays tax in the country where profits are earned, instead of using an Irish subsidiary.

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

A European Commission spokesperson told IT Pro: "We note with interest Facebook's announcement. The commission will continue its work in 2018, notably with proposals to ensure a fair and effective taxation of the digital economy", the official added.


This moves comes after significant pressure and scrutiny from the US and Europe for its tax practices. Ireland has now opened an account for Apple to deposit the money in, though both it and Apple have appeals against the decision.

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.

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

For Ireland, the value of Facebook's headquarters here is mainly the jobs created not the corporation tax it pays, Mr Coffey said.

The move is unlikely, however, to result in Facebook paying much more tax, since it declares relatively little profit in Britain. "And some of these royalties relate to United Kingdom sales", said chancellor Philip Hammond.

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