Brexit will largely fix this, won’t it?

Like Google, Apple and other hi-tech multinationals, eBay routes income from customers in many of its largest markets, including the UK, through a European sales hub located in a tax-friendly country. The income can then flow into further controversial tax structures that ultimately wipe huge sums off the group’s tax bills.

UK losing millions in VAT from non-EU sellers on Amazon and eBay
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Last year, the then British chancellor George Osborne introduced a new punitive tax, known as the diverted profits tax, designed to target tech businesses artificially shifting UK revenues abroad. He said such practice had “abused the trust of the British people”.

12 comments on “Brexit will largely fix this, won’t it?

  1. The UK isn’t losing a penny.

    The thieving scum of the British state is down–but that is more money they can’t use to oppress us with.

    Please don’t anybody bother with the skools n’ hospicals, weirdos and nor’fins (the 28-going–on-14 yr old mid-east yobbo kind that is).

  2. I’m not sure it will. But I don’t know tax too well.

    The reality is that eBay UK is doing close to fuck all to make that money. Those 372 people in London are basically doing stuff that is best done here rather than in Silicon Valley. And in the case of eBay that isn’t very much. It’s things like features on their website for the UK, some localisation, dealing with corporate clients,

    Imagine a situation where eBay was more like a franchise. So, eBay UK was a UK company run by someone separate. He would hand over something like 99% of the money to eBay USA. Because they do around 99% of the work.

  3. 1.4bn? That sounds like the revenue of the sellers on UK, not the revenue of Ebay.
    £185m ebay fees on that £1.4bn sounds about right. What with advertising etc.
    So £1.1m on turnover itself of £185m – suggests profit of what? 3%?
    Sounds pretty normal.

    Is this a non story?

  4. I heard a tale recently from a chap who works for the British subsidiary of a US “tech” firm. He told me that one advantage of the arrangement is that it is instructive to the Global HQ when the British subsidiary introduces an innovation in one third the time and at 10% of the cost of the equivalent introduction by the boys in The Valley.

    Sometimes British bodies are flown out to explain how such miracles are achieved. It’s a matter of contention among the Brits whether they should blurt out part of the truth: fewer bloody meetings, but ears open in the meetings you do hold.

  5. I’m certaiby no expert on the Diverted Profits Tax. I do’t know for examole whether, because the UK government says it’s a new tax and not CT or VAT or any other existing tax, it will be able to try to raise a charge to cover diverted VAT or diverted Income Tax or whether it is just allegedly diverted CT.

    However, the concern is certainly that it would fall foul of a DTA, which are all binary treaties, rather than any EU/EEA directive or ECJ ruling.

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