Finance

Facebook announces ad revenue reroute: When Irish eyes are crying

Facebook announces ad revenue reroute: When Irish eyes are crying

The announcement comes as policymakers push digital companies - many of which have set up shop in low-tax countries like Ireland and Luxembourg - to be more transparent about where they pay corporate tax.

It's not clear yet how much extra tax Facebook will pay as a result of this, and there is still enough wiggle room for plans to change further down the line.

The change will apply to countries where the social network has dedicated offices.

"Each country is unique, and we want to make sure we get this change right".

It has already shifted to a similar model in the UK.

Social Media giant Facebook will change its tax structure meaning instead of recording all advertising revenue through its worldwide headquarters in Dublin, Ireland it will be recorded by tis local companies in those countries.

Republicans agree on 21 percent corporate tax
If all goes according to plan, the Senate would take the bill up on Monday and the House would follow on Tuesday or Wednesday. That forecast comes from the Trump administration's budget. "It's not like people don't know these issues", he said.

Non-US sales from from SMEs and individuals who advertise on Facebook using its automated booking system will continue to be booked through Ireland.

That means that rather than directly route its revenue to its global headquarters in Dublin, local policymakers and governments will potentially get an opportunity for greater visibility into the company's revenue related to local advertising sales.

The changeover will take until mid 2019 to complete, although it is understood that larger European nations such as France and Germany - where complaints against its old strategy are most vociferous - will be at the head of the queue.

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.

Although Wehner said Facebook's goal is greater transparency, the company's move is likely also a response to the growing scrutiny in tax reporting for major tech enterprises in the EU.


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