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Parliamentary questions
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19 February 2020
Question for written answer
to the Commission
Rule 138
Carmen Avram
 Answer in writing 
 Subject: American tax authorities accused Facebook of ‘downplaying’ the value of its assets to pay less US tax: software and trademarks transferred to an Irish subsidiary

American tax authorities have accused Facebook of ‘downplaying’ the value of its assets as part of a scheme to pay less US tax in a court case that could cost the social media company more than USD 9 billion (1) .

Facebook has been challenged about how it calculated the value of intellectual property such as software and trademarks transferred to an Irish subsidiary in 2010. The US Internal Revenue Service claimed that Facebook attempted to downplay the value of these intangible assets for transfer pricing purposes (2) . This refers to the internal transactions carried out by multinational companies to book more of their revenue and profits in low-tax regimes.

Ireland’s headline corporate tax rate is 12.5 %, compared to the 35 % per cent federal tax rate in the US at the time. Facebook has not disclosed the tax rate that it actually paid on its Irish business a decade ago.

Facebook has denied all allegations.

Mark Zuckerberg wrote (3) that he supported recent efforts by the Organisation for Economic Cooperation and Development ‘to create fair global tax rules for the internet’.

1. Is the Commission also looking into Facebook’s transfer pricing and taxes paid in its European base in Ireland?

Tax reform:

2. Can the Commission provide a figure for Facebook’s advertising revenues or the amount that firms earn by harvesting and selling our personal data?

Last updated: 6 March 2020Legal notice - Privacy policy