Facebook agrees to pay millions more in tax

Facebook agrees to pay millions more in tax

Kerry Wise
December 15, 2017

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

In a bid to appease governments and regulators, Facebook no longer plans to send its global advertising revenue to its headquarters in Ireland, instead paying taxes for the countries in which it operates.

"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", Wehner said.

Wehner said Facebook plans to implement the change through next year with a goal of switching all its offices to the new structure by the first half of 2019.

This change will cause a significant shrinkage in Facebook's Irish tax bill, although it is not known just how much of the revenues booked through its Dublin base are connected to large advertisers.

Cinemas return to Saudi Arabia
On Monday, Saudi authorities made a decision to allow the opening of cinemas after a ban that lasted for more than three decades. The project is also a part of a comprehensive reform program aimed at reducing the country's dependence on oil.

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.

Last year, Facebook began recording revenues for United Kingdom sales in Britain, resulting in a modest increase in the tax it paid there.

Currently, the European commission is expected in March to release proposals on increasing tax to multinational digital companies.

Facebook past 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.

Facebook pays a notably small percentage of its large Irish revenue as tax, because its profits here are relatively small. Much of the company's earnings are said to be derived from intellectual property, created in the United States but now likely held in Bermuda or another low tax jurisdiction, so deductible royalties will need to be paid to the country holding the IP.