Facebook is set to pay millions of pounds more in tax in the UK after a major overhaul of its tax structure. After
heavy criticism that it was avoiding tax,
Starting in April, the world’s largest social network will change its
policy so that revenue generated from its largest advertisers
displaying content on Facebook will be routed through the UK rather than
Ireland. The change is expected to generate higher taxable profits in
Britain and forms part of the US company’s plan to mitigate criticism of
tax avoidance.
Facebook said: “On Monday we will start notifying large UK customers
that from the start of April they will receive invoices from Facebook UK
and not Facebook Ireland.”
The company added that the move had been planned for some time. Where
Facebook UK deals with advertisers directly “adding value” to the
transaction, advising companies and planning ads, it will invoice
through the UK. Facebook’s largest advertising customers in Britain
include Tesco and Sainsbury’s as well as major advertising buyer WPP.
Smaller businesses that use the social network’s online ad buying
tools will still be invoiced through Facebook Ireland, which will remain
the company’s international headquarters handling all business outside
of North America.
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