Facebook has decided to close three Irish holding companies in order to repatriate their intellectual property to the United States.
Facebook prefers to leave Ireland's tax advantages to
escape European regulations on user data management.
The Sunday Times and The Guardian have just announced that Facebook has decided to close three Irish holding companies in order to repatriate their intellectual property to the United States. This decision on the part of the group led by Mark Zuckerberg will allow user data to be managed in the UK according to US and non-European laws. In a statement, the company said: "Like other companies, Facebook must make changes in response to Brexit. Simply put, the legal responsibility of UK users will shift from Facebook Ireland to Facebook Inc.
Facebook Inc. takes over.
Like Facebook, many tech giants have taken advantage of (and still take advantage of) Ireland's fiscal arrangements to avoid paying taxes for many years. In 2016, the Internal Revenue Service (IRS) sued Facebook and opened an investigation to learn more about the company's practices. In this huge legal battle, the Internal Revenue Service was able to prove that Facebook had lied about its true value and owed it more than $9 billion. As a result, the G20 countries agreed to try to revise tax legislation in an attempt to squeeze out the benefits reaped by these large corporations.
Today, by leaving Ireland, Facebook is committed to paying the taxes that the company owes. For example, in 2019, Facebook paid only £100,000 in additional taxes in the UK while its profits increased by 25%. Without the benefits of the Irish policy, Facebook's payments are expected to increase significantly in the near future.
If Facebook is making this decision, it is not out of good conscience. The company is mainly seeking to escape one of the strictest European regulations in the world regarding the management of user data. Jim Killock, managing director of the Open Rights Group, said: "This announcement means that the actions of Europeans to limit the power of technology giants will not apply to British citizens. Facebook will therefore be able to try to impose its law in the UK without worrying about the European Union.