Starbucks new announcment – A (coffee) break from tradition

The Seattle-based coffee giant Starbucks has announced this week that it intends to move the majority of its operations from the Netherlands to the UK, where it currently has 800 stores and 7,500 employees. 

The company, along with other multinationals, such as Amazon and Google, has been criticised both in public and the media, and via parliament for the discrepancy between its UK profits and its levels of corporation tax paid here over recent years. 

While the company has said that it does not expect its tax liabilities to change significantly, it does acknowledge that more tax will be paid in the UK, with less paid in the Netherlands, where some operations will remain. 

The structure of the EU means that companies can operate across all countries but manage their tax affairs so that they can pay the sums of tax that are most beneficial to them, using facilities such as loans, subsidiaries and licensing fees. Stark figures, such as Starbucks’ lack of corporation tax paid to the Treasury in 2011, instigated a series parliamentary hearings and questioning of the multinationals’ practices, and led to promises of change from both the UK government and opposition, and the EU itself. In addition, campaigns were launched to encourage people to buy their coffee elsewhere. Last year, the company contributed £5 million in tax in the UK. 

Starbucks appears to intend to move its executives to its Chiswick office in London by the end of this year, in order to take advantage of London’s position as a fast-growing market. The company also plans to open 100 more Starbucks coffee shops in the UK this year. 

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