Fb is squaring off towards the US over greater than $9 billion in allegedly unpaid taxes, Financial Times experiences.

The US‘ Inner Income Service (IRS) says Fb deliberately “downplayed” mental property (IP) it transferred to a subsidiary in Eire in 2010.

Fb valued that IP, which reportedly contains software program and logos, at $6.5 billion. The IRS, however, maintains that quantity ought to’ve been nearer to $21 billion.

[READ: Czech gov needs to slap a 7% advert tax on web giants like Google and Fb]

Tax authorities say the transfer primarily shifted an enormous chunk of Fb‘s income from the US to Eire, which meant the social media big averted paying America’s 35% company tax fee on its deflated numbers — as a substitute being answerable for simply 12.5%.

Fb not the primary to make use of ‘switch pricing’

The method of transferring property to jurisdictions with low taxes is known as “switch pricing.” It’s widespread amongst multinational corporations throughout international growth, one thing that Fb skilled over the previous decade.