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I know this seems outrageous on the face of it, but I suspect the truth may be quite a bit more nuanced. There's not nearly enough detail here to know what's go

I know this seems outrageous on the face of it, but I suspect the truth may be quite a bit more nuanced. There's not nearly enough detail here to know what's going on. Some possibilities that spring to mind: 1. They may have taken advantage of special tax credits offered by the government for activities that it was deemed to be in the best interest of society at large. 2. Ebay UK may have carry-forward losses from a previous year that lowered their tax. 3. These "sales" may just be gross revenue, completely ignoring the issue of COGS, which means gross income might only be $50m or something much lower. I know the article cited Ebay's global profit margin as being 23%, but is that on gross revenue or gross income? That seems high to be on gross revenue... 4. This revenue may have been earned by subsidiaries owned by Ebay UK, but the money was never brought into the UK and has been reinvested into those subsidiaries. For example, Ebay UK owns Ebay Monaco, where there are no corp taxes. Ebay Monaco does $10m in profit. If they sent that money back to Ebay UK, they'd owe UK taxes on it. Instead, they reinvest it into hiring more staff and expanding the Monaco office. If and when the money goes back to the parent entity, it'll be taxed then. Getting upset about corporate tax law based on newspaper articles is a fool's errand. EDIT: More details: http://www.forbes.com/sites/timworstall/2012/10/21/ebay-is-not-avoiding-taxes-no-this-is-instead-the-point-of-the-system/ http://www.forbes.com/sites/timworstall/2012/10/21/ebay-is-n... Looks like they're just taking advantage of EU law to have payments from consumers go to a subsidiary in a lower tax jurisdiction. How is this different from running your company in Texas instead of New York for lower state taxes?

lancewiggs 14y ago
It's legally fine, but ethically corrupt, and ultimately means the country you are doing business in will decline. Pay your taxes. And governments - fix these issues, which are only going to increase as we shift to more and more virtual services.
- maratd 14y ago
  > ethically corrupt There is nothing ethically corrupt over paying the taxes you legally owe. There is no ethical or moral duty to pay more than what you owe. Do you hire somebody to do your taxes? I do. Am I ethically corrupt because I take measures to make sure I don't pay more than I have to?
ekianjo 14y ago
I am aware of how this is done in large companies, and usually they set up their financial headquarters in countries with low corporate tax rates, such as Switzerland in Europe, or Singapore in Asia, then build up connections with their operations in surrounding countries using "commissionaries" (not sure if the english term is correct) status, meaning that most revenues are transferred to the financial headquarter and then the headquarters pays back for the costs of doing business (salaries, rents, material expenses) to each country operations. This saves litteraly billions of tax dollars and it is perfectly legal where it is practiced. Where do you think politicians put their money, by the way? It's very natural for private companies to reduce costs where possible, and reducing taxes is certainly a clever way to do so. This is, I believe, very positive, as it shows to the countries with high tax rates that they are missing out on tax dollars simply because they are making it way to expensive for large corporations to operate that way. This means any tax increase (like the ones suggested recently in France) will more likely hit the small and mid-sized players who do not benefit for the same know-how and scale to manage their tax cuts efficiently -> therefore reducing the actual benefit of further raising taxes. The fact that these practices remain legal puts a stop on inflating taxes gaps between countries as well. By the way, avoiding taxes LEGALLY does not mean it is "ethically" corrupt to do so. I, for one, consider that taxation has very little ground when you see how much of the money the State collects is wasted in so many ways, through poor management, bad investments, poor efficiency, making war (that only a minority approves of), and seen how much power you have to change anything about it. On the contrary, limiting the growth of the amount of cash controlled by the State should be considered a good thing, in absolute terms.
hackerboos 14y ago
What annoys me about articles like this is that people tend to get angry at the corporations. What do you seriously expect them to do? They are entities that exist to maximize profit. The only time we should be angry at corporations is when they actually break the law. When corporations are paying low taxes and doing so legally; it's politicians we should be angry at.

lancewiggs 14y ago

It's legally fine, but ethically corrupt, and ultimately means the country you are doing business in will decline. Pay your taxes. And governments - fix these issues, which are only going to increase as we shift to more and more virtual services.

maratd 14y ago
> ethically corrupt There is nothing ethically corrupt over paying the taxes you legally owe. There is no ethical or moral duty to pay more than what you owe. Do you hire somebody to do your taxes? I do. Am I ethically corrupt because I take measures to make sure I don't pay more than I have to?

ekianjo 14y ago

I am aware of how this is done in large companies, and usually they set up their financial headquarters in countries with low corporate tax rates, such as Switzerland in Europe, or Singapore in Asia, then build up connections with their operations in surrounding countries using "commissionaries" (not sure if the english term is correct) status, meaning that most revenues are transferred to the financial headquarter and then the headquarters pays back for the costs of doing business (salaries, rents, material expenses) to each country operations. This saves litteraly billions of tax dollars and it is perfectly legal where it is practiced. Where do you think politicians put their money, by the way? It's very natural for private companies to reduce costs where possible, and reducing taxes is certainly a clever way to do so. This is, I believe, very positive, as it shows to the countries with high tax rates that they are missing out on tax dollars simply because they are making it way to expensive for large corporations to operate that way. This means any tax increase (like the ones suggested recently in France) will more likely hit the small and mid-sized players who do not benefit for the same know-how and scale to manage their tax cuts efficiently -> therefore reducing the actual benefit of further raising taxes. The fact that these practices remain legal puts a stop on inflating taxes gaps between countries as well. By the way, avoiding taxes LEGALLY does not mean it is "ethically" corrupt to do so. I, for one, consider that taxation has very little ground when you see how much of the money the State collects is wasted in so many ways, through poor management, bad investments, poor efficiency, making war (that only a minority approves of), and seen how much power you have to change anything about it. On the contrary, limiting the growth of the amount of cash controlled by the State should be considered a good thing, in absolute terms.

hackerboos 14y ago

What annoys me about articles like this is that people tend to get angry at the corporations. What do you seriously expect them to do? They are entities that exist to maximize profit. The only time we should be angry at corporations is when they actually break the law. When corporations are paying low taxes and doing so legally; it's politicians we should be angry at.