Kindly pay tax on your ebay profits Tuesday, February 20, 2007
Apparently some people actually make a living buying & selling on ebay, but don't seem to regard this as taxable income!
Hence the US and UK authorities are taking a keen interest in the commerce being conducted via auction sites and are contemplating requiring these business to report customers that carry out many transactions (say 100) and to a reasonable value (say $5k) i.e. indicative of being a "trader".
"Unfair" cries ebay. It claims it isnt a broker/ middleman/ auctioneer/ auction house, but is simply a web site that operates like a shopping mall, which happens to have an auction-style feature. Moreover, they claim it would be very unfair to target them and not plain classified sites like Craigslist.
Hmmm. Call me simple minded but isn't there a fundamental difference operating here - Craigslist is an ad site where no transaction may actually result from the listing, whereas ebay is intended to be a place to transact and their fees are intrinsically linked to transaction value.
I can appreciate that there will be some additional overhead for ebay in providing the data, but most of this transactional data is already collected by ebay. Is their protest actually more to do with the fact that some customers will be deterred from using ebay if their activities were notified to the tax authorities, and hence ebay's revenues will be affected?
Labels: ebay
posted by John Wilson @ 5:38 PM Permanent Link
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2 Comments:
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At 8:03 PM,
Adam said...
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Agreed that their argument doesn't hold water. They are right that they shouldn't be singled out. If the governments make this happen, they should require this of all eBay-like sites.
I think eBay might be worried that another site that does not have to report seller earnings could come along and steal eBay's power sellers.
Of course, the sellers will always go where the customers are. -
At 5:07 PM,
said...
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Interesting... It is a little bit different in some regards though. I mean, in the main, the stuff on here will have had VAT paid on it, etc. when originally purchased. (Assuming sourced in UK).
And mostly the final sale value will be less than originally paid for it or something comparable to it at best. I'm not sure that in a lot of cases the money made on say 100 transactions will necessary warrant the money spent by the taxman investigating it. (Probably worth less revenue than the cost to recoup the money?...)
A couple of thousand transactions then maybe...
Of course, it only takes 1 high value transaction to make an obscene amount of money if the goods are a touch on the warm side though, but if it's just one item, that won't show up either.
Also, I guess it is reasonably straightforward for someone to create a different account every few months, with a different email address, etc. and then that adds to the difficulty...
Suspect that maybe in reality in the majority of cases it's probably a big headache to monitor and actually get worthwhile tax revenue out of?...
