Facebook says it “does not anticipate” any job losses in Ireland and is committed to long-term investment as it announced it would start booking advertising revenue locally instead of rerouting it via its international headquarters in Dublin.
Facebook chief financial officer Dave Wehner said the company had decided to move to a local selling structure in countries where it has an office to support sales to local advertisers, causing analysts to speculate about the implications for Ireland after such a move.
“In simple terms, 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,” Mr Wehner said.
The revenues through Dublin were more than 50% of Facebook’s global revenues of €23.3bn in 2016, annual accounts show. An almost 60% rise in revenues helped Facebook Ireland boost pre-tax profits by 59% to over €174m. However, it paid just €30.4m in tax.
Facebook Ireland head Gareth Lambe said the advertising restructuring would not affect operations, with the company saying it did not anticipate job losses among the 2,000-strong workforce in Dublin.
“Ireland will continue to be an important part of Facebook’s story as the home of our international headquarters supporting our global communities and advertisers. We are continuing to grow in Ireland and recently announced that hundreds more jobs will be created at Facebook Dublin in 2018 and the expansion of the data centre in Meath, further demonstrating our long-term investment and commitment here,” Mr Lambe said.
Corporate taxation has become a hot topic in the wake of revelations of tax avoidance schemes by multinationals which have led to calls for companies to pay more tax while the EU has begun exploring options for taxing digital giants.
The announcement follows Facebook’s April 2016 shift to recording revenues from its large UK sales customers in the UK which resulted in an increase in the tax it paid.
The commission is working on legislative proposals to increase taxes on multinational digital companies, which are accused of paying too little in the EU by booking profits in low-tax countries where they have their EU headquarters, like Ireland and Luxembourg.
Additional reporting Reuters