American coffee house chain Starbucks is moving its European headquarters from Amsterdam to London at the end of this year, in the wake of a row over its low tax bill, the Financieele Dagblad says on Wednesday.

‘We are moving to Britain because by far the majority of our European branches are there,’ Kris Engskov, Starbucks director for EMEA, told the paper.

In addition, Britain is advanced in innovation and ‘that is where we should be’. Starbucks is in the process of expanding its format by offering wine, beer and light meals. A third reason is that Starbuck’s main rival Costa Coffee is also located there, he said.

Taxes

Engskov says there is no connection between the decision to move and the tax row which engulfed the company in Britain in 2012.

Over the past 15 years, Starbucks has only paid profit tax once – in 2007 – and reported a loss on its operations in the other years, despite having more than 800 branches, the Financieele Dagblad says.

Starbucks paid some €700,000 in corporate taxes in the Netherlands in 2012.

Tax havens

British politicians and tax campaigners said the company was funnelling its profits through the Netherlands to other destinations with more favourable tax regimes.

Others said the European head office in Amsterdam was charging the other European outlets too much for intellectual property rights and for roasting and distributing the coffee itself, the FD says.

Engshov denied this to the FD, saying ‘all shops and countries pay the same, including our partners and franchise operations’. Instead he blamed the losses on too-high rents.

Jobs

The move to London will not cost many jobs to start with because only ‘several European team leaders’ will make the move. More people could move in the medium term, depending on the company’s strategy.

Starbucks only plans to keep the ownership of its British, French and German operations and is looking for partners and franchisees in all other territories.

Only eight of the 46 Dutch Starbucks outlets are actually owned by the US company.