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Facebook will now start paying tax locally
Facebook has said that its new move will provide more transparency to governments and policymakers around the world.
Lately, digital giants are facing a lot of political pressure to pay more taxes from government bodies. As such, Facebook has announced plans to move to a local selling structure in countries where it has an office. The company's move is aimed at paying tax in the country where profits are earned.
Currently, advertising revenue supported by Facebook's local teams are recorded by its international headquarters in Dublin, Ireland. Now that the change in its selling structure has been announced it means that advertising revenue supported by the local teams would be recorded by its office in that country.
"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," Dave Wehner, Chief Financial Officer, Facebook, wrote in a blog post.
The social media giant is expected to start paying tax on its local operations across roughly 30 jurisdictions outside the US including France, Germany and eight other EU countries where it has local offices, according to Politico.eu. "It is our expectation that we will make this change in countries where we have a local office supporting advertisers in that country. That said, each country is unique, and we want to make sure we get this change right," Wehner said.
The company has said that it will roll out new systems and invoicing as quickly as possible to ensure a seamless transition to our new structure. "We plan to implement this change throughout 2018, with the goal of completing all offices by the first half of 2019."