Facebook is pressured to declare their ad revenues in the country they are made, instead of Ireland.

This move came about after it was noted that Facebook has a greater tax advantage in Ireland, where Facebook’s international headquarters are based. Governement and policy makers has been calling for greater visibility into sales made in their countries.

“In simple terms, this means 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,” Dave Wehner, Facebook’s chief financial officer, said in a statement yesterday.

According to Wehner, changes in tax reporting would be made by mid-2019 in countries where Facebook has an office supporting advertisers. AFP reported that “Rules for corporate taxes, as conceived for traditional economic activity, are based on the principle of “permanent establishment”. To be taxed, a company must have a physical presence in a country, but digital enterprises can offer their services over the Internet from a country of their choice, like Ireland, which offers Facebook tax advantages.”

According to reports, Facebook’s taxes on ad revenues in 2015 were minimal in France and Germany, but came up to €7.9 billion (RM38 billion) in Ireland, where there are fewer Facebook accounts.

Source: AFP