Starbucks Corporation (SBUX) Pays UK Corporate Income Tax For Second Time in 15 Years, Breaks With Record of Tax Avoidance

on June 24 2013 10:27 AM

Starbucks Corporation (Nasdaq:SBUX) finally paid 5 million pounds ($7.7 million) in U.K. corporation tax, the company announced on Monday. The last time it paid U.K. corporation tax was 2009, according to the BBC

Seattle-based Starbucks has only reported taxable profit once in 15 years in the U.K., with a "small profit" in 2006, according to a December 2012 U.K. parliamentary report.

The Public Accounts Committee said it “found it difficult to believe” that Starbucks had losses for almost every year of its operations in the U.K. The committee added that Starbucks’ record of losses was inconsistent with claims it made to shareholders, where it said it notched 15 percent profits.

Starbucks paid 8.6 million pounds in corporation tax over 14 years, reported Reuters in a special investigation from 2012. It paid nothing in corporate income tax in 2009-2012, even after sales of 3.6 billion pounds.

“We listened to our customers in December and so decided to forgo certain deductions which would make us liable to pay £10 (million) in corporation tax this year and a further £10 (million) in 2014,” a Starbucks spokesperson told the BBC.

Starbucks was one of three multinationals subject to a tax avoidance investigation in 2012 by U.K. lawmakers. The other two firms were Amazon.com, Inc. (Nasdaq:AMZN) and Google Inc. (Nasdaq:GOOG).

In that investigation, which sparked a public outcry in Britain, the committee suspected that Starbucks made special arrangements with its Dutch, U.S. and Swiss arms, solely to shift profits from the U.K. to low-tax havens. 

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