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  • sbuxfraud sbuxfraud Jun 24, 2013 11:57 AM Flag

    Corporate taxes

    By Tom Bergin

    LONDON, Dec 2 (Reuters) - Coffee chain Starbucks said it was considering changes to its UK tax practices, which allowed it to make billions in revenue while paying little in income taxes, following criticism from lawmakers, tax campaigners and the media.

    A Reuters examination of Starbucks accounts published in October showed the company had reported 13 years of losses at its UK unit, even as it told investors the operation was profitable and among the best performing of its overseas markets.

    The chain's UK unit paid no corporation tax - a tax on a company's income - in the last three years for which figures are available and has only paid 8.6 million pounds income tax since 1998, despite racking up 3 billion pounds ($4.8 billion) of sales.

    The revelations led to calls for a boycott of the store and protests at its branches, and the company's Chief Financial Officer Troy Alstead was called to give evidence to a parliamentary committee.

    Starbucks repeated on Sunday that it had always complied with British tax laws and blamed its low tax payments on a tough operating environment in the UK.

    However, a spokeswoman added in an emailed statement that the public mood had caused the company to reconsider its tax arrangements, which include intercompany royalty and interest payments that reduce the UK unit's taxable profit.

    By Tom Bergin

    LONDON, Dec 2 (Reuters) - Coffee chain Starbucks said it was considering changes to its UK tax practices, which allowed it to make billions in revenue while paying little in income taxes, following criticism from lawmakers, tax campaigners and the media.

    A Reuters examination of Starbucks accounts published in October showed the company had reported 13 years of losses at its UK unit, even as it told investors the operation was profitable and among the best performing of its overseas markets.

    The chain's UK unit paid no corporation tax - a tax on a company's income - in the last three years for which figures are available and has only paid 8.6 million pounds income tax since 1998, despite racking up 3 billion pounds ($4.8 billion) of sales.

    The revelations led to calls for a boycott of the store and protests at its branches, and the company's Chief Financial Officer Troy Alstead was called to give evidence to a parliamentary committee.

    Starbucks repeated on Sunday that it had always complied with British tax laws and blamed its low tax payments on a tough operating environment in the UK.

    However, a spokeswoman added in an emailed statement that the public mood had caused the company to reconsider its tax arrangements, which include intercompany royalty and interest payments that reduce the UK unit's taxable profit.

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