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eBay latest multinational to find its UK tax practices in the spotlight

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Online marketplace eBay has become the latest member of the multinational internet retailing community to find its UK tax practices in the spotlight.

Earlier this year a Guardian investigation found Amazon’s tax affairs were being examined by HMRC. It found that the leading online retailer had turned over more than £3.3bn in the UK last year but paid no UK corporation tax because its operations here are owned by Luxembourg-based Amazon EU Sarl and are classed simply as an order fulfilment arm of that business.

Now eBay has become the subject of a Sunday Times investigation which showed that eBay channeled payments through Luxembourg and Switzerland to avoid paying nearly £50m in tax. It said eBay turned over nearly £800m in annual sales in the UK, but paid little more than £1m in corporation tax in the UK. It calculated that eBay’s UK profits would have been £181m in 2010 and corporation tax £51m. But it paid only £1.2m that year as a result of sales channelled through Luxembourg and Switzerland.

eBay told the Sunday Times that it worked with tax authorities and “complies fully with all applicable tax laws and regimes – including national and internationally recognised rules”.

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