The UK arm of eBay paid only £1.6m in corporation tax last year, even though its US parent had total revenues by its UK operations of $1.32bn (£1bn).
Ebay’s UK accounts record only £200m in revenues, which came entirely by a Swiss parent firm, seemingly for acting as its advertising agency.
The company declined to explain how its UK revenues were not booked though its UK business.
However, an eBay spokesman said its tax affairs were entirely legal.
“In all countries along with at all times, eBay will be fully compliant with national, EU along with international tax rules including those of the OECD, including the remittance of VAT to the appropriate authorities,” he said.
The pre-tax profit eBay UK made on its revenues in 2016 was £7.7m, according to the accounts, along with the item was on which figure which the UK corporation tax was levied.
Ebay will be a huge international business which makes money mainly by advertisers along with the commission on sales made through its auction site.
The total revenues of $1.32bn which the parent US business generated by the UK included those by subsidiaries such as the Stubhub ticket exchange along with Gumtree classifieds site.
Within the group, the UK arm of eBay will be wholly owned by eBay International, which will be based in Switzerland along with will be itself owned by eBay inside US.
The firm’s UK accounts describe the role of eBay UK as providing “services to eBay International by recommending market penetration along with advertising strategies for the UK internal marketplace along with related third party advertising sales inside UK, Germany, Italy, Belgium along with Australia”.
The seeming ability of the company to shelter most its UK profits by the UK tax authorities raises again the ability of big international companies to route their revenues to the countries with the most favourable tax regimes.
which has led inside past few years to intense scrutiny of the tax practices of big firms such as Apple, Amazon, Google along with Starbucks.
Ebay inside US, whose international revenues hit $9bn last year, acknowledged which its tax affairs were under scrutiny in several countries, which may leave the item 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 US (Federal along with California), Germany, Korea, Israel, Switzerland, United Kingdom along with Canada,” its US accounts said.