Home World Business Ebay paid UK corporation tax of £1.6m in 2016

Ebay paid UK corporation tax of £1.6m in 2016

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Ebay mobile appImage copyright PA

The UK arm of eBay paid just £1.6m in corporation tax last year, even though the US company had total revenues from its UK operations of $1.32bn.

Ebay is a huge international business that makes money mainly from advertisers and the commission on sales made through its auction site.

The company declined to explain how its UK revenues were not booked though its UK business.

An eBay spokesman said its tax affairs were entirely legal.

“In all countries and at all times, eBay is fully compliant with national, EU and international tax rules including those of the OECD, including the remittance of VAT to the appropriate authorities,” he said.

The UK arm of eBay is wholly owned by eBay International, which is based in Switzerland and is itself owned by eBay in the US.

The £200m revenues generated by eBay’s UK arm last year, according to its accounts, came entirely from its Swiss parent, seemingly for acting as its advertising agency.

The accounts describe the role of eBay UK as providing “services to eBay International by recommending market penetration and advertising strategies for the UK internal marketplace and related third party advertising sales in the UK, Germany, Italy, Belgium and Australia”.

The pre-tax profit eBay UK made on those revenues in 2016 was £7.7m, according to the accounts, and it was on this figure that the UK corporation tax was levied.

The ability of big international companies to route their incomes to the countries with the most favourable tax regimes has come under intense scrutiny in the past few years.

Among those criticised have been Apple, Amazon, Google and Starbucks.

Ebay in the US, whose international revenues hit $9bn last year, acknowledged that its tax affairs were under scrutiny in several countries, which may leave it with more tax to pay.

“The material jurisdictions where we are subject to potential examination by tax authorities for tax years after 2002 include, among others, the U.S. (Federal and California), Germany, Korea, Israel, Switzerland, United Kingdom and Canada,” its US accounts said.

EBay also owns the Stubhub ticket exchange and Gumtree classifieds site.

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