Research and Markets - New Invoice Process to Cost Facebook Millions in Tax

Mar 04, 2016, 08:11 ET from Research and Markets

DUBLIN, March 4, 2016 /PRNewswire/ --

The global social networking market is set to grow at a CAGR of around 18% by 2020, according to a recent report available from Research and Markets. The report notes how social network advertising has gained popularity over the last decade due to user participation, and how it offers a solid platform for advertisers to market their brands and products. However, the manner in which advertisers use social media is expected to change in the coming years, as it was revealed today that Facebook Inc. will stop routing advertising UK client sales through their Ireland headquarters.

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Facebook decided to change its advertising sales operations in an effort to improve company transparency following criticism over alleged tax avoidance. From April, UK advertising customers will receive invoices from Facebook UK rather than Facebook Ireland, a move expected to cost the social media giant millions of pounds in future tax bills. It is not known what the future implications of this decision will be, but it is anticipated to have a knock-on effect on related areas of the market. 

The global in-app advertising market is to grow at a CAGR of 39.97% by 2019, as highlighted in an industry report. Although Facebook's new invoice system may not directly affect advertisers, it could result in changes such as more costly advertising fees and location limits for specific ads.

Similarly, the global mobile ad spending market is set to grow at a CAGR of 38.12% by 2019, as stated in a technology report. This growth could be lower if social media companies are required to charge higher fees due to increased taxes, as advertisers may begin to seek out less expensive alternatives to social media marketing.

For further information on this topic, and a full list of all related documentation, please visit the Social Media section at http://www.researchandmarkets.com/rm/MMLK.

Source: http://www.bloomberg.com/news/articles/2016-03-04/facebook-to-pay-millions-of-pounds-more-in-u-k-tax

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