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Press watch: ‘Big five internet firms paid 0.8pc tax on UK profits’

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‘Internet giants avoided about £650m in UK corporation tax in 2010 by legally taking payments via offshore companies, according to analysis by Financial Mail. The research into the tax paid by Apple, Amazon, Google, eBay and Facebook will reignite the debate as to how much tax multinationals pay. In most cases British customers are buying goods or services from offshore divisions of the internet groups, not their British arms.

‘Figures from the companies’ American filings suggest that the five made revenue of £12.2bn in Britain in 2010 from British consumers and advertisers. On the basis of their global profit margins for the year, that would mean profits for the five from sales to British customers would have amounted to almost £2.5bn. Corporation tax at 28% would have seen them pay £685m. Instead, subsidiaries established by the five in Britain paid just over £19m in 2010, or 0.8%.

‘Facebook, Google and Apple base their European operations in Ireland, where the corporation tax rate is half the UK’s, while Amazon and eBay base theirs in Luxembourg. Facebook said it could not comment because it was in a closed period before its American listing. Google said: “We have an obligation to our shareholders to set up a tax efficient structure and our present structure is compliant with the tax rules in all the countries where we operate.” EBay said: “We comply fully with all applicable tax authorities and regimes.” Amazon said: “We have a single European headquarters in Luxembourg.” Apple declined to comment.’

Mail on Sunday, 15 April 2012