Facebook Ireland pays €38m tax on €251m profit
Social media giant channelled €18.7 billion in revenue through Dublin in 2017
While gross profit at Facebook’s Irish arm amounted to €18.1 billion last year, administrative expenses of €17.8 billion meant profit before tax increased 44 per cent to €251 million.
Facebook’s Irish arm paid €38.3 million in tax last year on profits of €251 million, recently-filed accounts show.
The social media giant channelled €18.7 billion in revenue through its Irish subsidiary, an increase of 48 per cent from the €12.6 billion recorded in 2016.
While gross profit amounted to €18.1 billion, administrative expenses of €17.8 billion meant profit before tax increased 44 per cent to €251 million.
Average headcount for the company, which recently announced plans to relocated to a site in Ballsbridge, Dublin 4, increased from 739 employees in 2016 to 1,008 last year.
Facebook generates revenue primarily through online targeted advertising. The company then bills third-party customers for advertisements on the platform which it delivers to users.
Although directors didn’t recommend a dividend payment during the year, the company ultimately paid a €20 million dividend during 2018.
Facebook Ireland’s effective tax rate reached 15.2 per cent during the year, down slightly on 2016 but higher than the statutory corporation tax rate of 12.5 per cent.
The Irish arm, which paid leases of €11.85 million on property during the year, transferred its 100 per cent shareholding in the company’s Swedish holding company to another group company for €160.5 million. It also made a €1.9 million investment in its Israel subsidiary.
Facebook Ireland is a wholly owned subsidiary of Facebook International Operations Limited, a company which is also incorporated in the Republic. Its ultimate holding company is US-listed Facebook Inc.
The company has come under pressure of late as politicians argue for more transparency and accountability from the company. Parliamentary committees from 11 countries, including the Republic, held an unprecedented joint meeting in Westminster on Tuesday to put pressure on tech giants such as Facebook and Google to adopt a more responsible approach to social media.
During the three-hour session the tech giant was repeatedly berated for its widespread sharing of personal data; for not doing enough to prevent the proliferation of fake news and fake accounts; and for allowing political interference (principally from Russia) and political advertisements undermine democratic institutions.
The directors of the company’s Dublin-headquartered arm reported that it had “adequate resources to continue in operational existence for the foreseeable future” and said that in 2018 the company would “expand operations in Ireland, continuing to support and grow its user, advertiser and partner communities”.