Starbucks Agrees To Pay British Corporate Taxes

After resisting for some time, Starbucks has agreed to pay corporate taxes in Britain. It was revealed earlier that the coffee company has paid no such taxes in the past three years.

Copyright © 2012 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

RENEE MONTAGNE, HOST:

NPR business news begins with a bitter taste, in Britain, for Starbucks.

(SOUNDBITE OF MUSIC)

MONTAGNE: After weeks of controversy over its accounting methods and at its British operations, Starbucks woke up and smelled the coffee. Yesterday, it announced it will start paying more taxes in the United Kingdom.

Vicki Barker reports.

VICKI BARKER, BYLINE: The recent revelation that Starbucks has paid no British corporate tax in the past three years led to boycott threats, here, and some embarrassing publicity.

And yesterday, Kris Engskov, the managing director of Starbucks U.K., announced the company will now pay up to $32 million in 2013 and 2014.

KRIS ENGSKOV: We're going to do it whether we make a profit in the next two years. Our customers have been very clear that they expect that we can and will do something - and that's why we're taking action, today.

BARKER: But Starbucks isn't out of the PR woods, yet. U.K. Uncut, a group that campaigns against corporate tax avoidance here, says the concession is not enough. It plans protests at Starbucks stores nationwide.

And British law-maker Stephen Williams says it should be the taxman, not Starbucks, determining the company's tax liability.

STEPHEN WILLIAMS: People have been joking that some of these multi-nationals seem to think that paying tax is voluntary. Well, Starbucks have just confirmed the joke, really.

BARKER: No one has suggested Starbucks was breaking the law. But British firms complain that foreign competitors like Starbucks, Google and Amazon are able to outsource their profits to countries with lower tax rates.

Starbucks may have buckled, but Amazon and Google continue to insist they pay all the U.K. tax they're legally obliged to.

For NPR News, I'm Vicki Barker in London.

Copyright © 2012 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.