Google, Amazon and Starbucks face questions on tax

Associated Press Modified: November 12, 2012 at 3:31 pm •  Published: November 12, 2012
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LONDON (AP) — British lawmakers on Monday accused major multinational companies of aggressive tax avoidance, amid calls by the U.K. government for a global crackdown on firms that seek to evade taxes.

In sometimes bitter exchanges at a three-hour parliamentary committee hearing, legislators questioned Starbucks, Google and Amazon about the amount they pay to the U.K. government in taxation.

Lawmakers scoffed as Troy Alstead, Starbucks global chief financial officer, claimed that the fact the coffee giant had reported losses for all but one of the 15 years it has operated in the U.K. was down to poor performance — and not an attempt minimize its taxes in Britain.

"You have run the business for 15 years and are losing money and you are carrying on investing here. It just doesn't ring true," said Margaret Hodge, head of parliament's Public Accounts Committee.

Alstead acknowledged to the panel that its taxable profits in the U.K. are calculated after royalties paid to its European headquarters in the Netherlands have been deducted. He said that Starbucks had a special tax arrangement with the Dutch government covering its headquarters, but declined to give details.

"Respectfully I can assure you there is no tax avoidance here," Alstead told the panel.

Companies operating in Europe can base themselves in any of the 27 European Union nations, allowing them to take advantage of a particular country's low tax rates.

Alstead insisted that Starbucks was not seeking to mislead investors or tax authorities about its performance in Britain.



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