Tuesday

17th Jul 2018

Facebook to shift ad revenue away from Ireland

  • Facebook says it now wants 'greater visibility over the revenue associated with locally supported sales.' (Photo: portal gda)

Facebook will no longer use Ireland as a means to slash its global tax bills following public and EU pressure over dubious corporate tax structures.

The move was announced Tuesday (12 December) by Facebook's chief financial officer Dave Wehner.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... our join as a group

Wehner said the company will stop rerouting international advertising sales through its Irish-based subsidiary, with an aim to start making the necessary changes in 2018.

"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," he said, in a blog post.

He described the plan as part of a larger strategy to provide greater transparency to governments and policymakers around the world.

The shift will likely pile on pressure for other big tech firms like Apple and Google, who also have their international headquarters based in Ireland, to follow Facebook's lead.

Facebook last year shifted just under €13 billion in revenues to Ireland, which in turn generated some €30 million in tax revenue to the country.

But such moves have sparked resentment among other countries, like France and Germany, where the bulk of the sales and profits were made in the first place.

Ten EU finance ministers in September, led by France's finance minister Bruno Le Maire, had demanded that big internet firms pay taxes on their turnovers, rather on profits, in an effort to raise more money for the public coffers.

The EU commission has also been shoring up pressure as it works out proposals on creating new rules to capture taxes from companies that make their money online.

Such online firms often manage to cut their bills, putting their more traditional physical-store based competitors at a huge disadvantage.

"On average, domestic digitalised business models are subject to an effective tax rate of only 8.5 percent, less than half compared to traditional business models," says the EU commission.

A study out in September by the London-based Centre for Economics and Business Research had also found that UK booksellers pay 11 times more than Amazon in corporation tax.

EU Commission president Jean-Claude Juncker had earlier this year said some €70 billion is lost to public coffers in Europe every year.

"The tax burden is 30 percent heavier on individuals than it is on multinational companies, so that is in intolerable," he said.

The commission wants a common corporate tax base for companies as part of its broader tax harmonisation policy.

The policy, tabled last year, would prevent multinationals from evading tax while allowing EU states to set their own tax rates. It aims to close loopholes exploited by big firms who shift their profits to low-tax regimes.

Pierre Moscovici, the EU finance minister, earlier last month demanded that member states adopt the common tax base, or CCCTB, to increase transparency.

But EU states like Malta balk at the idea over fears it would undermine their corporate tax competitiveness.

A recent report by the UK-based NGO Tax Justice Network says the proposal would slash Malta's tax base, as well as those of Estonia and Slovenia, by more than half.

Other bigger economies like Germany, Spain, United Kingdom and Italy would all see a substantial increase, it notes.

EU takes time to ponder tech giant tax

The EU commission published a paper that outlined several options on how to increase tax income from internet companies' activities, but fell short of proposing legislation.

Austrian privacy case against Facebook hits legal snag

Austrian privacy campaigner Max Schrems may sue Facebook Ireland in an Austrian court but won't be able to pursue a class action suit in Austria, according to a non-binding opinion by a top EU court advisor.

'No backsliding' on Brexit promise, Irish PM warns

Leo Varadkar, the first leader to address MEPs in a series of speeches on the EU's future, pledged to close tax loopholes, pay more into the EU budget, and keep London to its word on Northern Ireland.

Facebook promises more privacy ahead of new EU rules

Speaking in Brussels, Sheryl Sandberg, Facebook's chief operating officer, says the social media giant has "not done enough to stop the abuse of our technology." Her admission comes with new plans to wrestle with "bad content".

News in Brief

  1. VW owners to get diesel software update free until 2020
  2. Airbnb breaches EU consumer rules, Commission says
  3. EU sees no China free-trade talks
  4. Italy accepts migrant boat after help promises
  5. EU opens case on Siemens' Alstom buyout
  6. Trump: May found my Brexit advice 'too brutal'
  7. Italy will reject EU-Canada trade deal, says deputy PM
  8. Commission: Juncker suffered from sciatica attack at Nato

Stakeholders' Highlights

  1. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  2. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  3. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  4. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  5. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  6. Mission of China to the EUChina: Work Together for a Better Globalisation
  7. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  8. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  9. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  10. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  11. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  12. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs

Latest News

  1. EU and China agree on words, not yet on action
  2. EU is 'foe', as Trump seeks to make friends with Putin
  3. Let's not be 'naive' with Chinese partner, says senior MEP
  4. Trump, trade, and Brexit in EU headlines This WEEK
  5. EU and China edge closer in Trump's 'America First' world
  6. How the World Cup exposed Russian chauvinism
  7. Stage set for Trump-Putin finale
  8. Trump scuppers trade deal with UK under May's Brexit

Stakeholders' Highlights

  1. Nordic Council of MinistersCooperation in Nordic Electricity Market Considered World Class Model
  2. FIFAGreen Stadiums at the 2018 Fifa World Cup
  3. Mission of China to the EUChina and EU Work Together to Promote Sustainable Development
  4. Counter BalanceEuropean Ombudsman Requests More Lending Transparency from European Investment Bank
  5. FIFARecycling at the FIFA World Cup in Russia
  6. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  7. Centre Maurits Coppieters“Peace and Reconciliation Is a Process That Takes Decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  8. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  9. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  10. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  11. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  12. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments

Join EUobserver

Support quality EU news

Join us