Facebook Inc. is changing its tax structure so that it will pay taxes in the country where sales are made, rather than funneling everything through its Irish subsidiary.
The company said it will move to a “local selling structure” in countries where it has an office to support sales to local advertisers. Menlo Park, California-based Facebook shifted its international business operations to Ireland in 2010.
Facebook has since come under pressure from the U.S. and Europe for its tax practices. Last year, the company said it would stop routing U.K. sales through Ireland after public outcry over news that Facebook paid only 4,327 pounds ($6,128) in taxes in 2014. In the U.S., the company is locked in a battle with the Internal Revenue Service that may cost it more than $5 billion, plus interest and penalties, related to global operations that are reported by the Irish unit.
“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,” Chief Financial Officer Dave Wehner wrote Tuesday in a statement.
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