The social media giant Facebook will pay millions more to the U.K. government after an overhaul of its current tax system.
The U.S. company has come under heavy criticism after reports last year, citing documents filed to the U.K. registrar of companies, showed it paid a total of £4,327 ($6,584) in corporation tax in the U.K. in 2014.
However, on Monday it will start notifying large U.K. customers that they will receive invoices from Facebook U.K. and not Facebook Ireland. Thus, Facebook will no longer funnel larger advertising sales through its Irish subsidiary which had allowed it to avoid higher taxes in the U.K.
"U.K. sales made directly by our U.K. team will be booked in the U.K., not Ireland. Facebook U.K. will then record the revenue from these sales," Facebook confirmed in a statement to CNBC.
"In light of changes to tax law in the U.K., we felt this change would provide transparency to Facebook's operations in the U.K. The new structure is easier to understand and clearly recognizes the value our U.K. organisation adds to our sales through our highly skilled and growing U.K. sales team."
Facebook will account for more revenue in the U.K. and pay a higher level of corporation tax on the profits it makes in the country. The news was first reported by the BBC but it's as yet unclear precisely how much tax it will now pay.
The new arrangement will begin in April this year but will be not backdated.
—Additional reporting by CNBC's Arjun Kharpal.