Changes by Facebook in how it records and reports ad sales on its platform is likely a direct result of pressure from governments that large digital marketing platforms pay taxes for income generated by selling ads locally.
"In simple terms, this means that advertising revenue supported by our local teams will no longer be recorded by our worldwide headquarters in Dublin, but will instead be recorded by our local company in that country", Dave Wehner, Facebook's chief financial officer, said in a statement released Tuesday.
The move will apply to all countries in which Facebook now has an office to support sales to advertisers, Facebook's Chief Financial Officer Dave Wehner said in a statement.
The European Commission has been to the forefront of attempts in Brussels to rein in the tax avoidance activities of web giants, many of whom maintain their worldwide headquarters in Dublin.
Facebook pays a notably small percentage of its large Irish revenue as tax, because its profits here are relatively small.
The policy change will be implemented throughout 2018 and the news post stated the goal is to complete the shift for all offices by the first half of 2018. As such, Facebook has announced plans to move to a local selling structure in countries where it has an office.
The move echoes Facebook's March 2016 decision to stop booking its United Kingdom advertising sales through Ireland and instead pay tax on those sales in the UK. "We are also making significant investments more in people, technology and processes, and - as Mark Zuckerberg said on the last earnings call - we are willing to reduce our profitability to make sure the right investments are made".
The European Commission is looking into ways to tax digital companies like Facebook as it seeks to raise money from an industry that the commission has said provides less tax than it should.