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Facebook to shut down Irish holding companies amid disputes over tax payments in Europe

Facebook to shut down Irish holding companies amid disputes over tax payments in Europe
Facebook to shut down Irish holding companies amid disputes over tax payments in Europe
The social media firm's Irish subsidiary brings in more than half of its global annual turnover.
  • Facebook is shutting down its Irish subsidiary following mounting pressure from regulators over the way it pays taxes in the EU.
  • The firm's Irish holding company brought in around $30 billion of revenue in 2018 - more than half of the firm's total annual turnover of $56 billion.
  • A Facebook spokesperson said the move was 'consistent with recent and upcoming tax law changes' advocated by policymakers around the world.
  • Visit Business Insider's homepage for more stories.

Facebook is winding down its Irish holding company in light of wider disputes over the way it pays taxes in the the European Union.

In 2018, the social networking giant's Irish subsidiary paid just $101 million in tax, while recording profits of more than $15 billion.

The subsidiary, Facebook International Holdings I Unlimited Company, also brought in around $30 billion of revenue, accounting for more than half of the firm's total annual turnover of $56 billion.

In a statement to The Times in London, a Facebook spokesperson said the Irish entity "was wound up as part of a change that best aligns with our operating structure." They added: "We believe it is consistent with recent and upcoming tax law changes that policymakers are advocating for around the world."

Big Tech companies face mounting pressure on the continent, where regulators are reevaluating the responsibilities large platforms should have on everything from data-sharing to misinformation.

At the end of last year, Google moved its own intellectual property holdings from Ireland back to the US, after regulators moved to phase out a loophole allowing US companies to delay paying taxes.

The tax strategy was legal and allowed Google to avoid triggering US income taxes, or European withholding taxes on the funds, which represent the bulk of its overseas profits.

Facebook's decision comes just months after the firm launched legal action against Ireland's data regulator, which is also trying to prevent EU user data being sent across to the US.

The firm's lawyer Paul Sreenan told Ireland's High Court the decision could have "devastating consequences" and mean Facebook's core app and Instagram being kicked out of the EU all together.

Business Insider approached Facebook for further comment.

Read the original article on Business Insider
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