![[Ireland] Facebook allowing its staff to work from abroad doesn’t alter tax status](http://gpa.net/cdn/shop/articles/bigstock-Wroclaw-Poland--Sep------390175624_1200x.jpg?v=1624877965)
Facebook’s decision to allow its staff to work from abroad will not alter its tax status in Ireland. This confirmation from the social media giant follows news that it is offering the opportunity to work remotely to employees at all levels of the organisation, The Irish Times reports.
The move has been made in spite of concern from other companies that allowing staff to work outside the jurisdiction could lead to corporation tax issues by diminishing the substance of Irish operations benefiting from the State’s low 12.5 per cent tax on business profits.
Facebook has said - effective last week - that employees whose work can be carried out remotely can now request a move. The company added that these employees will be subject to local income tax and employment law in their new country. The decision makes ad hoc arrangements introduced during the first COVID-19 lockdown of 2020 permanent.
Responding to the question of whether such changes would lead to corporation tax issues if a large portion of its workforce was no longer based in Ireland, Facebook said it still wanted to grow its Irish operation. It said there was no alternation to plans for a new campus at Ballsbridge, Dublin which would accommodate up to 7,000 staff.
Beginning later this month, any employee will be able to move from the US to Canada or from Europe, the Middle East or Africa to anywhere in the UK. Previously this option was only available for technical or recruiting roles.
By January 2022, Facebook employees will be allowed to permanently move between seven more countries. The countries are Ireland, France, Germany, Italy, Netherlands, Poland, Spain and the UK. There was already cross border remote work between Ireland and the UK before the June 10 announcement of this news.
Facebook is one of the largest business organisations in the State, its revenues were €34.3 billion in 2019, with €481.9 million in pretax profits and €173.2 million in corporation tax liabilities that year.
Replying to questions on the matter a Facebook spokesperson said, “Remote work will not have any impact on the substance of our operations here or employee numbers on balance.
“Facebook Ireland will remain the [Europe, Middle East and Africa] headquarters, where senior decision-makers and functions including content operations, user support, data protection, privacy operations and the office of the data protection officer are and will continue to be based.
“Furthermore, we don’t expect employee numbers to decrease. If anything we expect them to grow as we continue to hire in Ireland.”
Multiple jurisdictions
The Revenue Commissioners said multinational business, by its nature, involved multiple jurisdictions. “Revenue administer corporation tax on a self-assessment basis, monitored by risk-focused compliance interventions,” the tax authority said.
“It is a matter for each company to take decisions and make determinations in respect of its corporation tax obligations having regard to all the facts and circumstances, the relevant governing legislation and the guidance issued.”
There is reportedly significant concern about the move by Facebook behind the scenes at the Department of Finance and discussions understood to be ongoing between Merrion Street and Revenue.
Sources highlighted the possible loss of income tax from workers who are not resident in Ireland and there is the worry that Facebook might set a precedent for other companies. The move was described as “hugely worrying” by one source who said that, if such a move became a trend, it would present “enormous challenges to the revenue base”.
As other companies make plans to reopen workspaces that have been largely closed since the pandemic began, many have already recalled staff to Ireland for tax reasons after letting them work abroad during lockdowns.
Source: The Irish Times
Facebook’s decision to allow its staff to work from abroad will not alter its tax status in Ireland. This confirmation from the social media giant follows news that it is offering the opportunity to work remotely to employees at all levels of the organisation, The Irish Times reports.
The move has been made in spite of concern from other companies that allowing staff to work outside the jurisdiction could lead to corporation tax issues by diminishing the substance of Irish operations benefiting from the State’s low 12.5 per cent tax on business profits.
Facebook has said - effective last week - that employees whose work can be carried out remotely can now request a move. The company added that these employees will be subject to local income tax and employment law in their new country. The decision makes ad hoc arrangements introduced during the first COVID-19 lockdown of 2020 permanent.
Responding to the question of whether such changes would lead to corporation tax issues if a large portion of its workforce was no longer based in Ireland, Facebook said it still wanted to grow its Irish operation. It said there was no alternation to plans for a new campus at Ballsbridge, Dublin which would accommodate up to 7,000 staff.
Beginning later this month, any employee will be able to move from the US to Canada or from Europe, the Middle East or Africa to anywhere in the UK. Previously this option was only available for technical or recruiting roles.
By January 2022, Facebook employees will be allowed to permanently move between seven more countries. The countries are Ireland, France, Germany, Italy, Netherlands, Poland, Spain and the UK. There was already cross border remote work between Ireland and the UK before the June 10 announcement of this news.
Facebook is one of the largest business organisations in the State, its revenues were €34.3 billion in 2019, with €481.9 million in pretax profits and €173.2 million in corporation tax liabilities that year.
Replying to questions on the matter a Facebook spokesperson said, “Remote work will not have any impact on the substance of our operations here or employee numbers on balance.
“Facebook Ireland will remain the [Europe, Middle East and Africa] headquarters, where senior decision-makers and functions including content operations, user support, data protection, privacy operations and the office of the data protection officer are and will continue to be based.
“Furthermore, we don’t expect employee numbers to decrease. If anything we expect them to grow as we continue to hire in Ireland.”
Multiple jurisdictions
The Revenue Commissioners said multinational business, by its nature, involved multiple jurisdictions. “Revenue administer corporation tax on a self-assessment basis, monitored by risk-focused compliance interventions,” the tax authority said.
“It is a matter for each company to take decisions and make determinations in respect of its corporation tax obligations having regard to all the facts and circumstances, the relevant governing legislation and the guidance issued.”
There is reportedly significant concern about the move by Facebook behind the scenes at the Department of Finance and discussions understood to be ongoing between Merrion Street and Revenue.
Sources highlighted the possible loss of income tax from workers who are not resident in Ireland and there is the worry that Facebook might set a precedent for other companies. The move was described as “hugely worrying” by one source who said that, if such a move became a trend, it would present “enormous challenges to the revenue base”.
As other companies make plans to reopen workspaces that have been largely closed since the pandemic began, many have already recalled staff to Ireland for tax reasons after letting them work abroad during lockdowns.
Source: The Irish Times
