Facebook's Winding Down Its Irish Tax Havens

Illustration for article titled Facebooks Winding Down Its Irish Tax Havens
Photo: Josh Edelson (Getty Images)

After spending the past few years funneling billions of dollars through Ireland as a way to take advantage of the country’s relatively low taxes, it looks like Facebook is packing up its overseas operation.

The Sunday Times was the first to spot a new document filed with the Irish Companies Registration Office show that Facebook had begun dissolving three of its Ireland-based holding companies that were largely used for holding onto Facebook’s global intellectual properties, and licensing out this IP to other international Facebook companies for a given fee.

After catching wind of what the tech giant was up to, the IRS sued Facebook in 2016 as part of a probe into the company’s potentially dubious bookkeeping practices. This was followed up with another suit in February of this year alleging that since the company first began shifting its IP holdings to Irish subsidiaries in 2010, Facebook sidestepped more than $9 billion in tax payments.

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While Facebook hasn’t yet responded to Gizmodo’s request for comment, a spokesperson told The Times that returning its IP from Ireland back to the U.S. “best aligns corporate structure with where we expect to have most of our activities and people,” and that “we believe it is consistent with recent and upcoming tax law changes that policy makers are advocating for around the world.

In addition to pissing off tax collectors, Facebook is currently facing a broad antitrust lawsuit from the Department of Justice and a plurality of state Attorneys General which seeks to unwind the social media juggernaut’s various properties.

I cover the business of data for Gizmodo. Send your worst tips to swodinsky@gizmodo.com.

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DISCUSSION

Finally giving up the Double Irish with a Dutch Sandwich, interesting.

As long as the companies are staying in legal lines, I find it hard to get outraged over their behavior here. Everybody does tax reduction - but countries choose to have tax structures that allow this, and others choose to be tax shelters and don’t face sufficient retribution for it.

And it is possible to crack down on them. The Swiss buckled under when the US put them under serious pressure to reveal who was using their accounts for illegal tax evasion a few years back. The US, meanwhile, finally itself banned anonymous shell companies.