The Brooklyn-based company would have been liable for σχεδόν 7m in corporate tax if it had booked all sales in the UK to its local entity, Etsy UK, according to a survey by the TaxWatch campaign team. Etsy, which was listed on the US-based Nasdaq in 2015, is liable for the UK digital services tax, which would be around 2, 2.4 million by 2020, according to TaxWatch, but that amount is still much lower than the company’s tax calculation due if all UK sales were registered here and not booked in Ireland. Since then, Etsy sales have increased by 68% in 2021 to $ 329 million, reaching a level more than six times higher than it had closed in 2018. The group also acquired the UK-based used fashion site Depop last June , adding millions more sales to this country in its books. George Turner told TaxWatch: “Despite Etsy’s moral claims, it’s actually another US tech company using the same tax structures as other US tech companies to transfer profits from the UK to the Irish tax haven.” . Turner said Etsy’s current tax account in the UK could be further reduced as the digital service tax could be abolished under a global tax deal organized through the OECD. Etsy is unlikely to be liable for a planned global corporate minimum tax backed by the OECD for global companies with sales of more than 750 million euros (64 643 million) – which is expected to be 15% of revenue. According to the plans, the companies that use tax havens will face an additional tax burden in their country of origin – the USA in the case of Etsy. Under the current plans, only companies with a turnover of more than $ 20 billion – compared to Etsy’s $ 2-3 billion – would be forced to pay additional taxes in the countries where they make their money. Etsy declined to comment on the details of TaxWatch’s calculation of its UK tax liabilities, but it is understood that the company paid a digital service tax in the country in 2020 and 2021. Subscribe to the daily Business Today email or follow the Guardian Business on Twitter at @BusinessDesk An Etsy spokesman said the company “has paid or collected any known and significant tax liabilities in accordance with applicable cross-border tax legislation.” Legislation on cross-border corporate taxation is extremely complex and Etsy is committed to paying our fair share. “Ireland is home to our international headquarters, where we employ dozens of people who support our international community in many critical business functions, such as software and product engineers, payment operations, technical project managers and member support.” Etsy said it endorsed the OECD’s attempt to “create a fairer and simpler model” for cross-border taxation, adding: “We strongly support a global consensus on how to tax the digital economy even if our tax bill is increased.”
