Report: Facebook closed Irish subsidiary and moved billions in profits back to US following IRS suit; Irish subsidiary paid $101M in tax on $15B profit in 2018
Facebook Inc. has moved to wind down several Irish holding companies that had allowed it to shift billions of dollars in profit to the country …Source:The Times.
Facebook's response, per the Times report, is to wind down the Irish holding companies entirely and move billions in booked profits back to the US — effectively conceding the structure rather than defending it in court, while the litigation itself continues.
First-order effects
Facebook's Irish subsidiaries stop booking offshore profit immediately, so future international earnings land on the US tax base while the IRS's $9B+ claim over past years remains unresolved.
Second-order effects
Other US tech companies running similar Irish profit-shifting structures lose their most prominent proof of durability and face the same enforcement template — an audit of what the transferred intangibles were actually worth in 2010.
Third-order effects
If the pattern holds, corporate tax competition shifts from where profits are booked to how transfer prices for intangibles are valued at the moment of transfer, narrowing the arbitrage that made low-tax jurisdictions attractive to IP-heavy firms.
The trend: Enforcement against undervalued intangible transfers is unwinding the Irish profit-shifting structures that US tech companies built in the early 2010s.
Facebook to close Irish holding companies at centre of tax dispute. Intellectual property to be repatriated to the US after tax authorities claimed it owed $9bn. https://www.theguardian.com/ ...
“Facebook is winding up Irish holding companies it has used to channel billions of profits to avoid paying taxes in the US, the UK and hundreds of other countries.” What a rotten little country we are, thanks to FG, FF, Greens and Labour. https://www.theguardian.com/ ...
“[Facebook]'s main Irish subsidiary paid just $101m (£75m) in tax while recording profits of more than $15bn in 2018” The IRS now claims they owe $9bn. via @JuliaKollewe https://www.theguardian.com/ ...
The US tax authorities are getting a big payday! Facebook has shut its Irish subsidiary that was at the centre of the tax dispute. The subsidiary paid $101m (£75m) in tax while recording profits of more than $15bn in 2018. https://www.theguardian.com/ ... https://twitter.com/...
“The move to wind down the units started after the IRS took Facebook to court, saying Facebook was shifting funds through Ireland to avoid U.S. taxes. Facebook also moved billions of euros in profits back to the U.S. from Ireland.” https://www.bloomberg.com/...
Facebook moves to wind down several Irish holding companies that had allowed it to shift billions of dollars in profit to the country, where it was lightly taxed, the Times of London reports https://www.bloomberg.com/...