Starbucks says 'will pay more tax' in UK after Europe HQ shift

Written by PTI | London | Updated: Apr 17 2014, 03:53am hrs
Starbucks said today it was re-locating its European headquarters from the Netherlands to Britain a year after the US coffee giant was heavily criticised by British lawmakers for tax avoidance.

The company, the world's largest coffee shop chain, said it would pay more tax in Britain as a result of the re-location, which is expected to take place at the end of the year.

Britain is the group's largest and fastest-growing market. Starbucks expects to open another 100 outlets there this year.

"By making this move, our senior leaders will be better able to oversee the UK market in which over half of our European stores - employing more than 7,500 employees - are located," the company said in a statement.

"This move will mean we pay more tax in the UK."

Starbucks and a number of other multi-national companies, including Amazon and Google, have come under pressure from politicians and campaigners over their tax affairs.

In 2012, Starbucks acknowledged it had not paid any corporation tax in Britain on sales worth Pound 400 million (Euros 485 million, USD 670 million) between 2009 and 2012.

It was able to do so by paying fees to other areas of its business - such as "royalty payments" for the use of the brand - which resulted in the company posting a series of losses.

It has reported profit only once since it entered the British market in 1998.

Last year, in the face of a public backlash over its tax arrangements in Britain, Starbucks agreed to pay Pound 20 million in instalments of corporation tax, adding it had "listened" to its customers.

The announcement came after British Prime Minister David Cameron launched a crackdown in 2012 to tackle tax avoidance, which is legal, and illegal tax evasion.