Is eBay avoiding tax? (In which I endeavour to improve on a post by Mr Tim Worstall)

On Monday I discussed how I think most of the real debate about corporate tax scandals is about people’s normative interpretations of the tax system, not the technicalities of the particular structures. Then I read this:

Another day, another report of an internet company avoiding taxes in the UK. This time it’s eBay, to follow the earlier stories about Facebook, Google, Apple and so on. What’s really rather sad about these stories is that they ignore the very structure of the law. This isn’t an aberration, some corporation bending the rules to dodge taxes. This is the very point and purpose of the legal structure around taxation itself.

Here’s the thing. Based on his tone, I really want to disagree with this article by Tim Worstall…but he seems to have reached the right conclusion, all be it for possibly the wrong reasons.

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On the contribution of corporate tax scandals to debate

My post last Tuesday provoked a disgruntled email from a tax academic. “I do not feel qualified to say whether the Starbucks royalty is excessive or not,” wrote my correspondent. “I think that is HMRC’s job. Do you feel qualified to say it is excessive? If so, on what evidence?”

This is a fair question, although the post in question does not make this assertion (I did, after all, spend a decade crafting carefully worded allegations against companies with big legal budgets…). But it got me thinking about the stalemate that exists around corporate tax exposés such as the recent ones concerning Starbucks and Facebook, as well as some of the older ones, such as Google and Vodafone.

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