Monday

19th Nov 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.

... or 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. US warns EU banks and firms against trading with Iran
  2. Merkel urged Romania not to move embassy to Jerusalem
  3. Protesters call for Czech leader to step down
  4. Former German chancellor labelled 'enemy' of Ukraine
  5. French lead opposition to Brexit deal on fisheries
  6. Private accounts of Danske Bank employees investigated
  7. UK's May defends Brexit deal to MPs, after ministers resign
  8. Brexit MP calls for 'no confidence' vote on May

Stakeholder

An open China brings opportunities to Europe

Some 60 years ago, the first major World Fair after World War II was held in Brussels. Sixty years on, China International Import Expo (CIIE), the first world expo dedicated to expanding imports, will open in Shanghai, China.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSTheresa May: “We will not be turning our backs on the Nordic region”
  2. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  3. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  4. NORDIC COUNCIL OF MINISTERSState of the Nordic Region presented in Brussels
  5. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  6. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  7. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  8. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  9. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  10. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  11. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  12. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs

Latest News

  1. Brexit dominates EU affairs This WEEK
  2. How the EU commission got tunnel vision on self-driving cars
  3. No-confidence calls against May put Brexit deal in doubt
  4. Key points of the Brexit deal (if it ever comes into effect)
  5. Romania heaps scorn on 'revolting' EU criticism
  6. US steps in to clean up Cyprus
  7. 'Decisive progress' on Brexit as British cabinet backs deal
  8. Asylum for Macedonia's ex-PM puts Orban on spot

Stakeholders' Highlights

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

Join EUobserver

Support quality EU news

Join us