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Facebook Bows To Int'l Pressure To Drop Irish Tax Arrangement

Facebook Bows To Int'l Pressure To Drop Irish Tax Arrangement

"It is our expectation that we will make this change in countries where we have a local office supporting advertisers in that country".

Facebook is shifting how it records advertising revenue to a local selling structure, which means that instead of recording ad revenue in its global headquarters in Dublin, it will record that income at its local companies in the countries where the ads were sold, per a company news post.

The change comes after pressure on large firms over their tax affairs from governments and the public.

The Irish Department of Finance said it would be inappropriate to comment on Facebook's decision, but a spokesperson said: "Ireland continues to take an active role in global work to reform the worldwide corporate tax system".

The European Commission has been to the forefront of attempts in Brussels to rein in the tax avoidance activities of web giants, many of whom maintain their global headquarters in Dublin.

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"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", Facebook chief financial officer Dave Wehner wrote in a statement on Tuesday.

Facebook pays a notably small percentage of its large Irish revenue as tax, because its profits here are relatively small.

Facebook paid just £5.1m in corporation tax in 2016, according to a Companies House filing. Facebook started billing customers in the United Kingdom from its local subsidiary, rather than through Ireland, a move that resulted in an increased tax bill for the company in the UK.

Wehner said the company plans to implement the change through 2018 with a goal of completing all its offices by the first half of 2019.