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Facebook announces plan to stop diverting some ad revenue through Ireland

15 December 2017

Facebook is shifting how it records advertising revenue to a local selling structure, which means that instead of recording ad revenue in its global headquarters in Dublin, it will record that income at its local companies in the countries where the ads were sold, per a company news post.

The move will affect how Facebook pays taxes in 30 countries including Germany, France, Spain, Italy, the Netherlands, Belgium, Norway, Poland, and Sweden. "It is our expectation that we will make this change in countries where we have a local office supporting advertisers in that country".

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

The European Commission is looking into ways to tax digital companies like Facebook as it seeks to raise money from an industry that the commission has said provides less tax than it should.

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.

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Facebook is set to shake up its tax structure in order to avoid criticism by governments around the world by paying tax in the countries they operate in as opposed to just through one low taxed base.

Facebook paid £5.1m in tax in the United Kingdom a year ago, as compared to £4.2m in 2015.

Facebook previous year diverted more than €12 billion of global revenues to Ireland, attracting the ire of governments in Europe and further afield who argue its existing strategy deprives them of tax. The company's move is aimed at paying tax in the country where profits are earned.

The commission has also ordered Apple Inc to pay about 13 billion euros (US$15.3 billion) in back taxes to Ireland, after it said the country granted unfair deals that reduced the tech giant's corporate tax bill.

Facebook announces plan to stop diverting some ad revenue through Ireland