Facebook Inc. announced a major change today to the way it reports advertising revenue outside of the U.S., claiming that it wants to be more transparent with local governments and businesses.

Currently, Facebook lumps its non-U.S. ad revenue into a single report through its international headquarters in Dublin, Ireland, but starting next year, the social media giant will begin reporting ad revenue locally in countries where it has an office.

“We believe that moving to a local selling structure will provide more transparency to governments and policy makers around the world who have called for greater visibility over the revenue associated with locally supported sales in their countries,” Dave Wehner, Facebook’s chief financial officer, said in a statement. “It is our expectation that we will make this change in countries where we have a local office supporting advertisers in that country.”

Wehner said that this change will “require significant resources” to implement fully since each country has unique laws and expectations. Facebook will gradually introduce the new reporting structure throughout 2018, and the company expects to have the system fully in place by the first half of 2019.

Although Wehner said Facebook’s goal is greater transparency, the company’s move is likely also a response to the growing scrutiny in tax reporting for major tech enterprises in the EU. The European Commission has taken a hard stance against what is considers to be unfair tax practices, and last week the commission forced Apple Inc. to sign an agreement to pay $15 billion in back taxes to the Republic of Ireland.

The European Commission is looking for ways to collect more tax from tech companies, which pay less than half the taxes of brick-and-mortar businesses, according to a report published by the commission in September.

“There are weaknesses in the international tax rules as they were originally designed for ‘brick and mortar’ businesses and have now become outdated,” the European Commission said in its report. “The current tax rules no longer fit the modern context where businesses rely heavily on hard-to-value intangible assets, data and automation, which facilitate online trading across borders with no physical presence.”

The European Commission is expected to introduce new legislative proposals in March that will increase taxes for digital businesses.

Photo: Facebook