US taxmen sue Facebook on transferred assets to Ireland

Washington, July 8 (IANS) The US Internal Revenue Service has sued social networking giant Facebook for the delay in sharing documents related to transferring its assets to Ireland in 2010 to cut corporate taxes.

Ireland’s top corporate tax rate is 12.5 percent, much lower than the US 35 percent, the Wall Street Journal reported on Friday.

The lawsuit is part of an investigation into whether some of those assets were undervalued “by billions of dollars,” the report added.

In 2010, Facebook entered into agreements with Facebook Ireland Holdings Unlimited to transfer the rights to its “online platform” and its “marketing intangibles” outside the US and Canada, said the lawsuit filed in US District Court in San Francisco this week.

The company also entered into a cost-sharing agreement with the Irish subsidiary to cover future development.

Facebook, however, rejected the lawsuit, saying that “Facebook complies with all applicable rules and regulations in the countries where we operate.”

According to the tax authorities, they went to court because Facebook has not responded to its requests and the statute of limitations on its probe which expires on July 31.

Facebook was ordered to produce the records on June 17 but “failed to appear.”

–IANS

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