eBay Joins the List of Companies Paying Very Low Taxes
In these austere times the public finances have never been under greater scrutiny. So it is perhaps not surprising that the taxes paid by some of the most famous multinationals are coming under the microscope.
Earlier this month social network Facebook was criticized after it emerged that they were paying under £200,000 in tax to the UK government. The Starbucks coffee chain faced similar criticism earlier this week as the company was found to pay no corporation tax in Britain at all , whilst auction site eBay has been the latest corporate giant to be accused of shirking their tax duties.
The auction giant was found to have paid just £1.2 million in tax to the UK government, despite the sites UK subsidiaries generating sales of over £800 million.
Investigations into their tax affairs suggest that the tax bill should have been nearer to £50 million. This is calculated by applying the 23% profit margin achieved globally by eBay to their UK operations, giving them a profit of £181 million in Britain. Instead they booked profits of just £4.4 million.
The auction site told the BBC: "eBay in Europe works with tax authorities and complies fully with all applicable tax laws and regimes - including national, EU, and internationally recognized OECD rules."
Whilst eBay and other corporate giants may be abiding by the letter of the law in their tax affairs, whether they are abiding by the spirit of the law is another matter entirely.
With world economies struggling, should large corporations be paying their fair share in tax or do you support them in getting around the tax laws?