IRS sues Facebook for $9b over Irish offshore deal

Facebook and US tax authorities are beginning a multi-billion dollar dispute over profits shifted to an Irish subsidiary by the social media giant.
The US Internal Revenue Service says that Facebook dodged about $9 billion in taxes. US media reported, however, that Facebook says it is owed a refund.
The IRS says that Facebook understated the value of the technology it licensed to an Irish subsidiary in 2010. Ireland has lower corporate tax rates than the US, so the move reduced the company’s tax bill. Facebook, however, has countered that it should have valued the technology even lower.
“This trial is about transactions that took place in 2010, when Facebook had no mobile advertising revenue, its international business was nascent, and its digital advertising products were unproven,” a Facebook spokesperson told the media, and added: “We look forward to presenting our case in court and putting an end to this years-long dispute”.
The OECD group of free-market economies has been working on a solution about multinational companies who manage to find a way to avoid paying taxes, even if that means they would have to pay more to national governments.
Earlier this month, Facebook’s founder, Mark Zuckerberg, backed the OECD moves, saying he accepts he may have to pay more taxes under the proposed digital tax reforms.