Facebook has bowed to global pressure and agreed to stop channeling its ad revenues through Dublin and instead book Revenue immediately within the country in which it is earned, following widespread public anger at its opaque tax affairs.
The largely symbolic gesture follows claims that global multinationals have been exploiting their scale to bypass national jurisdictions in order to pay less tax, creating a public relations headache for the social network.
In a blog post, Facebook’s chief financial officer Dave Wehner wrote: “In simple terms, this means that advertising revenue supported by our local teams will no longer be recorded by our international headquarters in Dublin, but will instead be recorded by our local company in that country.
“We believe that moving to a local Selling Structure will provide more transparency to governments and policymakers around the world who have called for greater visibility over the revenue associated with locally supported sales in their countries.”
Wehner attests that the switch to local selling structure in countries where it already has an office by early 2019 will bolster sales to local advertisers.
Those wishing to see Facebook cough up more tax are likely to be disappointed however with the company paying a mere £5.1m in corporation tax the year to 31 December – despite revenues increasing from £210.8m to £842.4m.
In the year prior Facebook paid £4.16m in tax while technology counterpart Amazon meanwhile paid a mere £15m in tax across Europe on revenues of £19.5bn.