Facebook announces ad revenue reroute: When Irish eyes are crying

Adjust Comment Print

University College Cork-based economist Seamus Coffey, an expert in corporation tax and head of the Government budget watchdog the Fiscal Advisory Council, said the move won't radically change Facebook's tax bill.

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

The social networking giant said the move was in response to pressure from governments and policy makers for greater visibility into sales made in their countries.

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. As such, Facebook has announced plans to move to a local selling structure in countries where it has an office. "It is our expectation that we will make this change in countries where we have a local office supporting advertisers in that country".

Menlo Park, California-based Facebook shifted its worldwide business operations to Ireland in 2010.

Not as cold tonight; cloudy skies through the weekend — FIRST ALERT FORECAST
We stay seasonable with morning lows in the upper 30s and afternoons in the lower 60s through the beginning of the weekend . Another cold front will move through Sunday , and this one will have more moisture associated with it.

To comply with these rules, Facebook is going to modify its tax structure so that it can pay tax in the country where profit is been earned. This is a large undertaking that will require significant resources to implement around the world.

This means that the corporation tax on the profits from those ads will be paid in those countries, instead of, as is now the case, in the Republic.

The European Commission is looking for ways to collect more tax from tech companies, which pay less than half the taxes of brick-and-mortar businesses, according to a report published by the commission in September.

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