Phil’s nowhere close to that… yet.
It seems the IRS is suing Facebook, to the tune of $9 billion. The bone of contention in this case is that they licensed their own intellectual property to an Irish subsidiary in an attempt to shift profits to a jurisdiction that has lower taxes. Per Reuters:
Under the arrangement, Facebook’s subsidiaries pay royalties to the U.S.-based parent for access to its trademark, users and platform technologies. From 2010 to 2016, Facebook Ireland paid Facebook U.S. more than $14 billion in royalties and cost-sharing payments, according to the court filing.
The company said the low valuation reflected the risks associated with Facebook’s international expansion, which took place in 2010 before its IPO and the development of its most lucrative digital advertising products.
“Facebook Ireland and Facebook’s other foreign affiliates – not Facebook US – led the high-risk, and ultimately successful, international effort to sell Facebook ads,” the company said in a pre-trial memorandum.
This practice was known colloquially as the Double Irish. While the original loophole that allowed companies to take advantage of Ireland’s lower tax rates is gone, the scheme in question is still very much alive, and becoming more elaborate.
Source: BoingBoing
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