Facebook has announced plans to move to a local ad selling model in order to address concerns from governments and policymakers who said the company wasn’t being very transparent about its finances. The move will see ad revenue supported by local Facebook teams recorded in those countries rather than at the international headquarters in Dublin. This move should see Facebook pay more of what it owes to each government around the world.
Dave Wehner, Facebook’s Chief Financial Officer, did note one caveat to the new plans, however:
“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. This is a large undertaking that will require significant resources to implement around the world. We 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.”
Despite the new plans, Facebook will retain its Dublin-based international headquarters, a place which boasts low taxes. There’s little doubt either that Facebook’s lawyers have been poring over ideas on how the company could avoid paying its due taxes; if governments around the world aren’t happy with the taxes they’re receiving we’ll likely see more condemnation of Facebook’s practices.
Professor Prem Sikka of the universities of Sheffield and Essex told the BBC that the company “may well be appeasing public opinion, while at the same time it takes a very small hit on profits, if any.” So while the move could have positive consequences, it’s a good idea to remain skeptical about the news.
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