The Herald of Everett, Washington
HeraldNet on Facebook HeraldNet on Twitter HeraldNet RSS feeds HeraldNet Pinterest HeraldNet Google Plus HeraldNet Youtube
HeraldNet Newsletters  Newsletters: Sign up | Manage  Green editions icon Green editions

Calendar

Splash! Summer guide

Weekly business news
HeraldNet Newsletter Delivered to your inbox each week.
Published: Friday, December 7, 2012, 12:01 a.m.

Starbucks promises to pay more taxes in U.K.

LONDON -- Starbucks bowed to mounting pressure over its tax affairs in Britain and revealed Thursday that it would pay about $16 million in each of the next two years.
Having been slammed by the country's lawmakers of "immorally" avoiding tax, Starbucks' U.K. managing director Kris Engskov said the firm had agreed to pay more than required by law.
"With the backdrop of these difficult times, in the area of tax, our customers clearly expect us to do more," he told the London Chamber of Commerce.
The Seattle-based coffee company has 700 British outlets, but has paid just $13.8 million in corporation tax in 14 years. Starbucks Corp. says this is due to a process involving paying royalties to its European headquarters in the Netherlands.
The company hasn't done anything illegal. Companies operating in Europe can base themselves in any of the 27 European Union nations, allowing them to take advantage of a particular country's low tax rates.
Earlier this week, Parliament's Public Accounts Committee criticized multinationals such as Starbucks, Amazon and Google for "using the letter of tax laws both nationally and internationally to immorally minimize their tax obligations."
Starbucks, which also has been the target of demonstrations by the protest group U.K. Uncut, announced this week that it was reviewing its tax approach.
Engskov said the company was proposing "to pay a significant amount of corporation tax during 2013 and 2014 regardless of whether our company is profitable during these years."
He estimated that would amount to "somewhere in the range of 10 million pounds in each of the next two years."
Labour lawmaker Margaret Hodge, who chaired the parliamentary committee, said Starbucks' change of heart was proof that "people power works."
Earlier this week, U.K. Treasury chief George Osborne earmarked an $124 million to clamp down on "offshore evasion and avoidance by wealthy individuals and by multinationals."
Story tags » Starbucks

Share your comments: Log in using your HeraldNet account or your Facebook, Twitter or Disqus profile. Comments that violate the rules are subject to removal. Please see our terms of use. Please note that you must verify your email address for your comments to appear.

You are logged in using your HeraldNet ID. Click here to update your profile. | Log out.

Our new comment system is not supported in IE 7. Please upgrade your browser here.

comments powered by Disqus
digital subscription promo

Subscribe now

Unlimited digital access starting at 99 cents, or included with any print subscription.

HeraldNet highlights

Bad behavior
Bad behavior: Start of crab season brings out the worst in some
Longer, farther
Longer, farther: Air New Zealand gets first stretched 787
From seed to store
From seed to store: Photo essay: Follow marijuana from the grower to the seller
Summer spirits
Summer spirits: Four refreshing drinks for hot days, suggested by local experts