| LONDON, April 19
LONDON, April 19 A report by the British
government auditor said the UK is losing up to 1 billion pounds
($1.28 billion) a year in value added tax (VAT) because of fraud
or error by sellers using online marketplaces eBay and
The National Audit Office (NAO) said on Wednesday that the
sellers involved are often based in China and that consumer
regulator Trading Standards had found that U.S. companies Amazon
and eBay had failed to remove sellers that were flouting VAT
rules, even after being informed of the sellers' non-compliance.
All retailers selling to customers in the UK must collect
VAT of 20 percent of the value of goods sold and pay this to the
government. Most western countries operate similar VAT systems.
EBay said it is committed to making its platform, where
sellers advertise their goods for sale, a fair place to buy and
"We will continue to work closely with (British tax
authority) HMRC to ensure that all sellers on our platform
comply with the law," eBay said in an emailed statement.
Amazon, which has also been criticised by British lawmakers
for using complex corporate structures to avoid paying tax on
the profits it makes from UK customers, did not respond
immediately to requests for comment.
New rules aimed at making operators of marketplaces liable
for VAT not paid by a seller identified to the operator as
non-compliant would help to tackle the problem, the NAO said.
The auditor said that eBay and Amazon supported this measure
but that Amazon had opposed another rule due to come into force
next year, under which such businesses must perform due
diligence checks on their overseas customers.
Amazon felt this was “disproportionate and ineffective”, the
In addition to offering a marketplace to sellers, Amazon has
a business that acts as a dispatcher for goods sold by
($1 = 0.7785 pounds)
(Editing by David Goodman)