Ebay is a huge international business that makes money mainly from advertisers and the commission on sales made through its auction site. The UK arm of eBay paid only £1.6m in corporation tax last year, even though the US company had total revenues from its UK operations of $1.32bn (£1bn).
The £200m revenues generated by eBay's UK arm last year, according to its accounts, came entirely from its Swiss parent, seemingly for acting as its advertising agency. The accounts describe the role of eBay UK as providing "services to eBay International by recommending market penetration and advertising strategies for the UK internal marketplace and related third party advertising sales in the UK, Germany, Italy, Belgium and Australia". The pre-tax profit eBay UK made on those revenues in 2016 was £7.7m, according to the accounts, and it was on this figure that the UK corporation tax was levied.
The UK arm of eBay is wholly owned by eBay International, which is based in Switzerland and is itself owned by eBay in the US.
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