Facebook announces plan to stop diverting some ad revenue through Ireland

The company will now record revenue and pay taxes in countries where it has offices

Facebook announces plan to stop diverting some ad revenue through Ireland

Picture by: Niall Carson/PA Wire/PA Images

Facebook has announced a change to its financial policy, meaning some advertising revenue will no longer be recorded in Ireland.

The change will apply to countries where the social network has dedicated offices.

Advertisements will be sold and recorded by 'local teams' - effectively meaning that the company will pay tax in the country where the ads are sold.

The social media company stressed that its international headquarters will remain in Dublin.

Dave Wehner, Facebook's Chief Financial Officer, explained in a blog post: "We believe that moving to a local selling structure will provide more transparency to governments and policy makers around the world who have called for greater visibility over the revenue associated with locally supported sales in their countries.

"Each country is unique, and we want to make sure we get this change right. This is a large undertaking that will require significant resources to implement around the world. We will roll out new systems and invoicing as quickly as possible to ensure a seamless transition to our new structure."

The change in policy will start being implemented in 2018, with all the company's local offices to switch over to the new model by 2019.

Facebook already has its main headquarters in California, and currently has offices in dozens of countries across Europe, Asia, the Middle East, and Latin & South America.

Facebook has long faced criticism over its international tax arrangements.

BBC reports that the social media company came under fire after it had paid only £4,327 (€4,900) in the UK in 2014 - although the tax bill has risen substantially in subsequent years.