Currently, Facebook lumps its non-U.S.ad revenue into a single report through its global headquarters in Dublin, Ireland, but starting next year, the social media giant will begin reporting ad revenue locally in countries where it has an office.
The change in policy will start being implemented in 2018, with all the company's local offices to switch over to the new model by 2019. "It is our expectation that we will make this change in countries where we have a local office supporting advertisers in that country". Facebook was careful to note that the new system would only apply in places where it already has a local office, and "this is a large undertaking that will require significant resources to implement around the world".
Still, some claim that Facebook's latest move is unlikely to result in it paying significantly more corporate tax. Ireland has now opened an account for Apple to deposit the money in, though both it and Apple have appeals against the decision. The company lowered its tax bill further by paying large royalties to companies resident in the Cayman Islands, shifting much of the profit from Dublin to the tax haven.
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"What matters for tax is where profits are generated [within multinationals], we know in Ireland that the large part of revenue flows through to the U.S.", he said.
For Ireland, the value of Facebook's headquarters here is mainly the jobs created not the corporation tax it pays, Mr Coffey said. Facebook Inc is changing its tax structure so that it will pay taxes in the country where sales are made, rather than funneling everything through its Irish subsidiary.
"So, from April 2019, and in accordance with our worldwide obligations, we will apply income tax to royalties relating to United Kingdom sales, when those royalties are paid to a low-tax jurisdiction".