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Tuesday, 04 December 2012 20:18

eBay under investigation

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According to Reuters, the United Kingdom and Germany have reportedly lost billions of dollars in revenue from taxes because of sales on eBay. The reason for the loss is that eBay chose Luxembourg as its headquarters for operations in Europe.

At that point, eBay joined a number of large companies whose business is largely based on the Internet. Because of this eBay is now being investigated by tax collectors around the world to see if they are using this as a method of tax avoidance. Even though eBay has a formal European headquarters in Luxembourg, where the office has only nine employees, revenues from sales go to the branch in the Swiss city of Bern, Swiss tax lawyers claim they have the most competitive tax regime for businesses in Europe. Specifically, Luxembourg has a low value added tax, while in Bern you have low tax for business income, so eBay takes the best from both countries.
While this is all legal according to European law, tax collectors can review the operations of these companies, making sure that the number of employees corresponds to the company's realized revenue, or whether the number of employees may actually support the company's operations in other countries. Therefore, it has been announced that the investigation should examine whether eBay's subsidiary in Luxembourg and Bern really lead the company's operations in all European countries, and whether there are illegalities in business.

[Ed – eBay is only one of a group of companies that are hiding inside the laws they fought very hard to get enacted. eBay and others claim headquarters in one country, but they actually run everything in another. The problem is that they do not pay the taxes of the countries where there main operations are located or they hide behind cloud services and drop ship warehouses. ]

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Read 3040 times Last modified on Tuesday, 04 December 2012 20:36

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