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Starbucks under fire in Britain over Dutch tax deal

Tuesday 13 November 2012

US coffee giant Starbucks came under attack in a British parliamentary commission on Monday for using the Netherlands to get round British taxes.

According to the Daily Mail, Starbucks has paid just £8.6m tax in Britain after 14 years of trading.

British MPs are angry Starbucks UK pays a 4.7% fee to the coffee giant's Dutch arm for the right to use its branding and coffee recipe. The fee, which the paper says has been as high as 6%, reduces its UK tax bill.

Tax deal

CFO Troy Alstead told the commission his firm had a deal with the Dutch government that gives Starbucks a special tax rate in Amsterdam.

The terms of the bargain, he said, were 'iron bound in confidentiality', and he that he couldn't reveal them in the open hearing.

Starbucks European headquarters and its roasting facility for Europe, the Middle-East and Africa are located in Amsterdam.

© DutchNews.nl


Readers' Comments

Half a million pounds a year tax for all the Starbucks in the UK? Dutch coffeeshops should get tax breaks like that too - but where to have their headquarters? Pity weed is so illegal in the UK, but maybe this is all about double standards anyway.

By Max Harmreduction | 13 November 2012 9:19 AM

Nothing new, The Netherlands is a tax heaven ... for corporation. But the best tax evasion is the one of IKEA, thanks to NL law, IKEA is not a company, it's a non profit organisation! Just look on wikipedia, their tax scam is explained there !

By bird | 13 November 2012 9:28 AM

Sour Grapes! Besides Britian shoud be angry with the Dutch government not Starbucks! They are just taking advantgae of the tax breaks that are available in Holland to manufacturers. I just wish SB would pass it on to the consumers...don't like to pay over 4 Euros for a latte!

By M | 13 November 2012 10:00 AM

'' The terms of the bargain, he said, were 'iron bound in confidentiality', and he that he couldn't reveal them in the open hearing''...in other words they know what they are doing is wrong and are too ashamed to admit it.And lets be honest it must be the worse coffee on the high street.

By jason buttle | 13 November 2012 10:21 AM

I'm starting to find the tax avoidance witch hunt in the UK amusing. Finally they have run out of other-people's-money. Spluttering indignation follows.

MP's set the rules for business.

By david | 13 November 2012 10:39 AM

They're not THAT secret. Typically the Belastingdienst agrees on a 10% CIT rate for any entity engaged in a Transfer Pricing set-up, as would be in the case of Starbucks. The idea is then that the entity hires local staff, which in turn generates jobs and adds personal incomce into the Exchequer's coffers.

By The Tax Man | 13 November 2012 11:36 AM

and I wouldn't be surprised if NL (Plc) sees very little in the way of tax receipts as well.

By H. | 13 November 2012 11:51 AM

If only individuals could be so fortunate to take such advantages. If someone can show me how to divert income from abroad to avoid a resident country's taxes then we'd be on a level playing field as the big corporations. It would be worth paying for this advice. Do I have any takers?

By roland | 13 November 2012 2:55 PM

Amazon.co.uk does quite similar stuff via luxemburg. The uk amazon is just a distribution company and pays almost no taxes. All the profits go yo the luxemburg branch.

By n | 13 November 2012 4:19 PM

I see that Mr Rutte is telling the country that "everyone will feel the pain." Will that apply to the corporate world? I doubt it. Cosy deals, immoral deals, The sooner this austerity environment is recognised as a condition of select corporates, Banks , politicians, money spinners and the like taking advantage of one group against another group, the sooner reality can surface. The Netherlands is deeply immersed in this world and shows little moral high ground in dealing with it...Where ever the cash comes from.! who cares...That seems to be the accepted mantra from these politically inept these days.

By mario | 14 November 2012 12:15 AM

UK just like to find fault with others. UK also have a tax haven island and there are many more tax haven countries around the world that the british love to use to escape tax liabilities.

By ufo | 14 November 2012 8:54 AM

Tax law is made locally by people with little understanding who are paid very low salaries and are not motivated.

Large corporations pay huge salaries to tax experts with the intelligence and motivation (bonus) to circumvent the rules by having broader vision.
Moving profits offshore to defer tax is an old trick.

I worked for a Japanese company who made "losses" on 1B$ turnover in Europe.
Simply products were purchased at Japan HQ for resale with a 10% margin -Japan made 80% profit on sales to European organisation

By nd | 14 November 2012 9:06 AM

i just wish there were more starbucks in the NL. it is not enough. their coffee is great.

By dork | 14 November 2012 9:09 AM

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