Numerous reports have been putting eBay’s UK tax bill under the spotlight after its UK accounts were filed with Companies House last week.
eBay (UK) Ltd made a corporation tax payment of £1.6m on a total profit of £7.7m. Total revenues last year came to £200m.
But eBay Inc. has reported that total revenues in 2016 from eBay’s operations in the UK were $1.3bn which includes income from Gumtree and Stubhub. So what’s going on?
The clue is in the accounts filed by eBay where they describe the activities of the UK operation. It provides “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.”
Swiss based eBay International owns eBay UK. eBay Inc. in the US owns eBay International. The Richmond based operation isn’t the entity that offers and operates the marketplaces. In tax terms they purely operate, as they suggest, as an advertising and marketing wing and also strategic advisers for the bigger eBay whole.
eBay has given its usual tax related comment regarding the situation: “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.”
And in an interview this week, the relatively new eBay UK head Rob Hattrell gave further details of eBay’s tax position in Britain. Hattrell said: “We pay all our tax in all jurisdictions. You have to look at broader contributions we make – at the people we employ and the businesses we employ.”
There’s nothing new or surprising about this particular arrangement of tax affairs. And neither is it one uniquely utilised by eBay. Starbucks and others employ a similar mechanism and it is entirely legal.
Even when you consider this, what do you think of eBay UK’s Tax bill?