Facebook is the world’s largest social media platform and is currently owns the world’s largest social chat platform WhatsApp, and the world’s biggest content uploading platform, Instagram. The major revenue of Facebook comes from its advertisements and it earns millions every year.
As such, there have been reports that Facebook has been shifting billions of dollars in profit through its Irish holding companies to avoid US taxes. Recent reports indicate that the company is winding down its Irish holdings after receiving pressure from the American government.
According to sources, the Irish companies were used to hold their intellectual property for international sales. Facebook offices from around the globe would pay the units for the use of the IP, shifting much of the sales outside the US. Thus the US Internal Revenue Service filed a case against Facebook in the court and the social media company was accused of shifting funds through Ireland to avoid US taxes.
“Intellectual property licenses related to our international operations have been repatriated back to the US. This change, which has been effective since July this year, best aligns corporate structure with where we expect to have most of our activities and people. We believe it is consistent with recent and upcoming tax law changes that policymakers are advocating for around the world.”
Well not that moving its funds to Facebook and paying actual taxes is going to result in decreasing its GDP. But a company as big as Facebook trying to evade taxes is a pretty huge deal. As to what other developments arise stay tuned for more info.
