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Zara channels online affairs through Ireland

Zara has joined the mini wave of companies moving their online business to Ireland, which boasts one of the lowest corporation tax rates in Europe, according to The Times newspaper.

The Spanish retailer now routes financial affairs of its web-based business through ITX E-Commerce Ireland Limited, based in Dublin.

Corporation tax in Ireland is 12.5%, compared with 18 to 24% in Spain.

Zara sells online in 15 countries. Other aspects of the fashion chain’s business, such as its logistical operation, remain in Spain.

In a statement the retailer’s owner Indetex said it was not Ireland’s tax benefits that led to the relocation of its online operations to the Irish capital. Instead, it insisted it was the “know-how” in Ireland, not fiscal reasons. The company said: “Inditex originally launched its internet shopping platform in Ireland, which already boasted the required e-commerce know-how, experience and technology.”

The company also revealed it will move the running of Spanish online sales to Spain starting in 2012, through Spanish-based Inditex E-Commerce SA, incorporated in July this year.

A spokesman for Indetex told Drapers: “The idea is to gradually handle online sales in each country - in the same way as Inditex manages its store sales worldwide.”

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