The UK arm of eBay paid solely £1.6m in company tax final yr, though its US dad or mum had whole revenues from its UK operations of $1.32bn (£1bn).
Ebay’s UK accounts report solely £200m in revenues, which got here solely from a Swiss dad or mum agency, seemingly for performing as its promoting company.
The corporate declined to clarify how its UK revenues weren’t booked although its UK enterprise.
Nonetheless, an eBay spokesman stated its tax affairs have been solely authorized.
“In all nations and always, eBay is absolutely compliant with nationwide, EU and worldwide tax guidelines together with these of the OECD, together with the remittance of VAT to the suitable authorities,” he stated.
The pre-tax revenue eBay UK made on its revenues in 2016 was £7.7m, in keeping with the accounts, and it was on this determine that the UK company tax was levied.
Ebay is a large worldwide enterprise that makes cash primarily from advertisers and the fee on gross sales made by its public sale web site.
The full revenues of $1.32bn that the dad or mum US enterprise generated from the UK included these from subsidiaries such because the Stubhub ticket change and Gumtree classifieds web site.
Inside the group, the UK arm of eBay is wholly owned by eBay Worldwide, which is predicated in Switzerland and is itself owned by eBay in the US.
The agency’s UK accounts describe the position of eBay UK as offering “companies to eBay Worldwide by recommending market penetration and promoting methods for the UK inner market and associated third celebration promoting gross sales within the UK, Germany, Italy, Belgium and Australia”.
The seeming capability of the corporate to shelter most its UK income from the UK tax authorities raises once more the power of massive worldwide corporations to route their revenues to the nations with probably the most beneficial tax regimes.
This has led prior to now few years to intense scrutiny of the tax practices of massive companies equivalent to Apple, Amazon, Google and Starbucks.
Ebay within the US, whose worldwide revenues hit $9bn final yr, acknowledged that its tax affairs have been beneath scrutiny in a number of nations, which can depart it with extra tax to pay.
“The fabric jurisdictions the place we’re topic to potential examination by tax authorities for tax years after 2002 embody, amongst others, the US (Federal and California), Germany, Korea, Israel, Switzerland, United Kingdom and Canada,” its US accounts stated.