Facebook today announced that it will stop booking some of its non-US advertising revenue in Ireland and instead pay tax in the country where sales are made.
The move will apply to all countries in which Facebook currently has an office to support sales to advertisers, Facebook’s Chief Financial Officer Dave Wehner said in a statement.
“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.
The move echoes Facebook’s March 2016 decision to stop booking its UK advertising sales through Ireland and instead pay tax on those sales in the UK.
Facebook’s decision to restructure its UK operations followed years of public outcry over the tech giant’s low UK tax bills and the UK government’s decision to enact a diverted profits tax on profits deemed to have flowed out of the UK through “contrived arrangements.”
Today’s move comes amid a worldwide push to revise international tax rules that allow large digital firms to avoid corporate tax.
Still, some claim that Facebook’s latest move is unlikely to result in it paying significantly more corporate tax. Much of the company’s earnings are said to be derived from intellectual property, created in the US but now likely held in Bermuda or another jurisdiction where it pays no or low tax, so deductible royalties will need to be paid to the country holding the IP.
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