Today, I am announcing changes that will result in Starbucks paying higher corporation tax in the UK – above what is currently required by law. Specifically, in 2013 and 2014 Starbucks will not claim tax deductions for royalties or payments related to our intercompany charges. In addition, we are making a commitment that we will propose to pay a significant amount of corporation tax during 2013 and 2014 regardless of whether our company is profitable during these years.
I have a feeling that this might actually make them liable to shareholder suits.
To pay all the tax you should is one thing. To pay more than that, voluntarily and knowingly, would seem to be risking breach of fiduciary duty.
I’d like to highlight a few details behind these commitments. To be clear, Starbucks UK will not claim deductions:
• For the royalties it pays
• For the intercompany profit on the coffee it purchases
• For interest paid on intercompany loans
• For capital allowance deductions nor our carry-forward losses
The first three are all changeable by the company itself anyway. Change the royalty rate, change the interest rate etc. But that last is ridiculous. Not claim the cost of fitting out a shop against tax?