Starbucks promises to pay more UK tax

Published on NewsOK Modified: December 6, 2012 at 10:13 am •  Published: December 6, 2012

LONDON (AP) — Starbucks bowed to mounting pressure over its tax affairs in Britain and revealed Thursday that it would pay about 10 million pounds ($16 million) in each of the next two years.

Having been slammed by the country's lawmakers of "immorally" avoiding tax, Starbucks' U.K. managing director Kris Engskov said the firm had agreed to pay more than required by law.

"With the backdrop of these difficult times, in the area of tax, our customers clearly expect us to do more," he told the London Chamber of Commerce.

The Seattle-based coffee company has 700 British outlets, but has paid just 8.6 million pounds ($13.8 million) in corporation tax in 14 years. Starbucks Corp. says this is due to a process involving paying royalties to its European headquarters in the Netherlands.

The company hasn't done anything illegal. 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.

Earlier this week, Parliament's Public Accounts Committee criticized multinationals such as Starbucks, Amazon and Google for "using the letter of tax laws both nationally and internationally to immorally minimize their tax obligations."

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