Facebook Will Pay Taxes Locally


This moves comes after significant pressure and scrutiny from the United States of America and Europe for its tax practices.

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

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.

"In simple terms, this means that advertising revenue supported by our local teams will no longer be recorded by our global headquarters in Dublin, but will instead be recorded by our local company in that country", explained Wehner.

Advertisements will be sold and recorded by "local teams" - effectively meaning that the company will pay tax in the country where the ads are sold.

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

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The move is a bid to provide more transparency for governments and lawmakers who have asked Facebook and other digital platforms for more visibility into the revenue associated with locally supported ad sales in those countries.

"We plan to implement this change throughout 2018, with the goal of completing all offices by the first half of 2019". Last year, the company said it would stop routing United Kingdom sales through Ireland after public outcry over news that Facebook paid only 4,327 pounds (RM23,575) in taxes in 2014.

The company has more than 30 worldwide offices.

BBC reports that the social media company came under fire after it had paid only £4,327 (€4,900) in the United Kingdom in 2014 - although the tax bill has risen substantially in subsequent years.

The EC found that Ireland handed Apple tax benefits that amounted to illegal state aid for 24 years, allowing the tech giant to pay an effective corporate tax rate of 0.005% in 2014.