Facebook’s decision to shut down the holding company in Ireland came after the US Internal Revenue Service (IRS) sued the company over its Ireland shore deal.
Social networking service company Facebook Inc (NASDAQ: FB) is closing holding companies in Ireland. The social networking service company is winding up the Irish holding companies after the companies helped bring in billions in profit without paying taxes.
Facebook in Ireland
On the 26th of December, the Times of London revealed Facebook’s plan to shut down holdings companies in Ireland. According to the report, Facebook used the Irish companies to hold its intellectual property for over-border sales.
Also, reports revealed that Facebook also transferred billions of euros from the holding companies in Ireland to the US.
In a statement to the Times, Facebook said:
“Intellectual property licenses related to our international operations have been repatriated back to the US. This change, which has been effective since July this year, best aligns corporate structure with where we expect to have most of our activities and people. We believe it is consistent with recent and upcoming tax law changes that policy makers are advocating for around the world.”
Citing Facebook’s documents, the Times of London stated that the company’s main Irish holding company only paid taxes worth $101 million from $15 billion in profits in 2018.
The Labour MP and chair of the parliamentary group on responsible taxation Margaret Hodge added:
“Facebook and the rest of the tech giants must do their moral duty and pay their fair share.”
Facebook’s decision to shut down the holding company in Ireland came after the US Internal Revenue Service (IRS) sued the company over its Ireland shore deal.
Facebook Faces Tax Court Trial
According to a Reuters report, Facebook was to have a tax court trial on the 18th of February. Per the court trial, the IRS said that Facebook owed over $9 billion. In addition, some of Facebook’s top executives were to testify during the trial. The executives include chief technology officer Mike Schroepfer, chief revenue officer David Fisher, and hardware chief, Andrew Bosworth. Other witnesses are members of Facebook’s aggressive growth team Naomi Gleit and Javier Olivan.
The report further revealed that Facebook underplayed the value of Irish property that is sold. In 2010, Facebook sold intellectual property to an Irish subsidiary.
Currently, Facebook stock is trading at $268.56. The trading price is a 0.43% gain over its previous close of $267.40.
In the last year, Facebook has climbed 28.69% and more than 30% since the beginning of 2020. In addition to increases, FB has climbed 7.16% in the last three months.
However, the company has been recording losses over the past month. Over the past month, Facebook has plunged by nearly 3%. The company has also dipped 2.58% in the last five days.
Notably, Facebook’s stock has been in the spotlight amid news about its lawsuits. Earlier this month, the social media giant received two lawsuits from the state and the federal level. The lawsuit from the state level lawsuit stated that Facebook bought competitors like Instagram and Whatsapp to preserve its domination power in the market.
Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.
