eBay won't pass UK Digital Service Tax costs on to third-party sellers – unlike Amazon, which simply can't afford it
- Reference: 1597320907
- News link: https://www.theregister.co.uk/2020/08/13/ebay_not_passing_on_digital/
- Source link:
From April, large multinationals that generate revenue via social media platforms, search engines or web souks were ordered to pay a 2 per cent tax on turnover in Britain. Last week, Amazon said it could no longer afford to pay that tax on behalf of the sellers that use its sales arena.
eBay, however, is clearly trying to exploit that to win favour, and who could blame them: "eBay is one of the marketplaces which will have to pay the new tax – and a lot of you have asked whether we at eBay will be passing on this tax to our sellers in the form of new fees.
"We wanted to reassure you that we won't do that, so you will not be charged additional new fees as a result of this tax," [1]the online auction house confirmed .
The introduction of the tax – which only kicks in after a business generates £25m in the UK via consumer sales – was because the British tax collector, HM Revenues & Customs, felt it was being cheated out of tax owed by companies including Amazon, Google, and Facebook. This measure is a stop gap after talks for a global digital tax by the OECD stalled when the US said it was walking away from the negotiating table.
"The government still believes the most sustainable long-term solution to the tax changes arising from digitalisation is reform of the International corporate tax rules and strongly support G7, G20 and OECD discussions on the different proposals for reform," [2]UK.gov said in April .
Silicon Valley Scrooges sidestep debt to society through tax avoidance to the tune of $100bn [3]READ MORE
"The government is committed to dis-applying the Digital Services Tax once an appropriate international solution is in place," it added.
Amazon, whose [4]reputation for tax efficiency precedes it, said [5]last week that as DST was being passed in the UK, and while talks over it with the British government were ongoing, it kindly "absorbed the increase" in tax but the business, founded and run by [6]richest man in the world Jeff Bezos, could simply no longer afford to do so.
"Now that the legislation has passed, we want to inform you that we will be increasing Referral fees, Fulfilment by Amazon (FBA) fees, monthly FBA storage fees and Multichannel Fulfilment fees by 2 per cent in the UK to reflect this additional cost," Amazon told its sellers.
Those fees would not be charged retrospectively and will kick in from 1 September, the e-commerce titan confirmed.
The European Commission is [7]currently investigating whether Amazon breaches EU competition rules by exploiting "sensitive" data gained from third-party sellers that use its platform. Globally, 58 per cent of Amazon Retail's shipments come from third-party sellers.
Margrethe Vestager, the EU commissioner who oversees competition policy, said she was intending to take a "very close look at Amazon's business practices and its dual role as marketplace and retailer, to asses its compliance with EU competition tasks."
Amazon [8]agreed to overhaul its Ts&Cs last year for third-party sellers on its marketplace in Germany to address complaints that they were treated unfairly. The ruling was expected to have a profound impact on Amazon's marketplace globally.
The amendments tackled compliance including "unilateral exclusion of liability to Amazon's benefit, the termination and blocking of sellers' accounts" and the "handling of product information and many other issues". ®
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[1] https://community.ebay.co.uk/t5/Announcements/Protecting-your-business-from-Digital-Services-Tax-costs/ba-p/6701162
[2] https://www.gov.uk/government/publications/introduction-of-the-new-digital-services-tax/introduction-of-the-new-digital-services-tax
[3] https://www.theregister.com/2019/12/04/silicon_valley_tax_sidestep/
[4] https://www.theregister.com/2018/08/03/amazon_might_pay_some_uk_tax/
[5] https://sellercentral-europe.amazon.com/forums/t/upcoming-fee-changes-in-the-uk-following-introduction-of-digital-services-tax/322163
[6] https://www.theregister.com/2018/05/03/bezos_billions_space/
[7] https://www.theregister.com/2019/07/17/amazon/
[8] https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2019/17_07_2019_Amazon.html
[9] https://whitepapers.theregister.com/
Re: On the breadline then Bezos?
Brexit: Claims about EU tax rules fact-checked
https://www.bbc.co.uk/news/50168357
Re: On the breadline then Bezos?
Is there a reason people would downvote a fact-check?
Re: On the breadline then Bezos?
"BREXIT meant that WE decided that you guys need to start paying tax and not the pittance you did before thanks to your legal slight of hand."
Yeah, right. BREXIT means WE leave the EU which told us to reclaim illegal tax breaks that the British Government had given to multinationals since 2013 when the UK included an exemption for certain income of multinational groups active in the UK, the so-called “group financing exception” to the “controlled foreign company” rules.
Amazon Prime Ripoff
My partner was after a specialist shampoo and she search on amazon and it came up at 9 euros a bottle plus 4 euros shipping.
Knowing I have a prime account with "Free Shipping" she asked me to order it.
However on my prime account it was priced at 13 euros with free shipping.
Some strange orwellian version of the "free" word. Definitely not "free as in beer".
Re: Amazon Prime Ripoff
I've stopped using them completely. The tax and worker treatment were bad enough on their own, but luckily coincided with a tidal wave of fake and/or poor-quality products on Amazon that shows no signs of abating.
If I can get it somewhere else, I do that. If Amazon's the only place I can get something, I don't get it and submit myself to life without it (which oddly enough turns out to be absolutely fine). Protip: getting in touch with bookshops directly can avoid you having to purchase through Abebooks. They're quite amenable to the idea of not paying fees.
Re: Amazon Prime Ripoff
I tend to use Amazon for the items. I've had more hit and miss on eBay such as;
- Seller says they are UK, even has a UK flag on them. No delivery for ages and then find out it's shipped from China.
- Seller had a Buy It Now. Never recevied item - turned out he's sold those 100 items to others and fraudulently vanished. Ebay actually refunded me after a case was opened - so can't complain on that one.
- Seller - item looks like this (shows a 3 pack/5 pack whatever) - single item turns up. Amazon do this too but at least you can 1 star it and send it for refund via Amazon.
Re: Amazon Prime Ripoff
I have cut the cord 99.99% completely. I go to UK suppliers (e.g. AO for fridge,washing machine etc, sometimes Argos) and they have good prices and good delivery) and i know they are not grinding their employees into the dirt. There is not one thing I have needed that I have no been able to find elsewhere. Sometimes I pay £5 or £10 more, but it is worth it. I also use eBay and I have been scammed or disappointed about five times over six years and hundreds of purchases. one has to look carefully at the vendor. Amazon will not amend itself until we make it hurt.
Re: Amazon Prime Ripoff
One of the reasons I've never swallowed the "Prime" propaganda.
How convenient
Amazon gets hit with an extra tax and passes it onto it's customers as charges that will bake it an extra £500,000 a year.
It sounds like they are treating it as a blanket 2% rather than allowing for their 1st 25 million in sales where they aren't charged the 2% and they will pocket the extra half million
Re: How convenient
That's Bezos's rules. Heads, he wins. Tails, you lose.
Avoid Amazon.
Re: How convenient
This article is about Amazon passing the tax on to the other companies who sell through Amazon. Whether the marketplace sellers then further pass on the costs to consumers will be up to them (the vast majority probably will).
Wrong approach
Shouldn't hit just one industry like that. Many of the other very large corporations are avoiding tax in similar ways.
I'd stop taxing on profits, because they can be exported in all sorts of technically legal ways. We already have a tax on turnover, but current rules refund most of it. VAT of course. So if we replace corporation tax with a slightly reduced VAT refund it will be extremely difficult to dodge. It would take a bit of thinking about, you'd aim to set the amount so that a company that has been honest over corporation tax will usually pay a similar amount.
And a side benefit is that 'certain countries' couldn't claim we were unfairly penalising their companies.
Re: Wrong approach
It's mentioned in the article that it's an interim measure and it's a turnover tax, but I agree. Loopholes need gone.
Re: Wrong approach
I suspect it will be a temporary measure, in the same way as income tax. ;-)
While I agree with this tax in principle it was only supposed to apply to business that had a turnover of over 25 million. Yet now thousands of UK small business who to survive have to sell on platforms like Amazon are now the ones having to pay this tax through the backdoor via increased Amazon fees. Amazon will actually be reducing their tax liability by passing on fees to its marketplace sellers.
.
On the breadline then Bezos?
you poor, poor thing.
Oh... I see that forked tongue of yours in action again.
I hope that Amazon UK gets a multi billion ££££ tax bill and as a result, decide to quit the UK. good riddance I'd say.
BREXIT meant that WE decided that you guys need to start paying tax and not the pittance you did before thanks to your legal slight of hand.
There is no dodging it this time Bezos.
He google, apple, Microsoft, Adobe, Oracle and the rest... We have not forgotten you. Your time will come. Get those funds ready.