In sometimes bitter exchanges at a three-hour parliamentary committee hearing, legislators questioned Starbucks, Google and Amazon.com about the amount of tax they pay to the United Kingdom.
Lawmakers scoffed as Troy Alstead, Starbucks global chief financial officer, claimed the Seattle-based coffee giant had reported losses for all but one of the 15 years it has operated in Britain because of poor performance — and was not an attempt to 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 Starbucks had a special tax arrangement with the Dutch government covering its headquarters, but he 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.
Note EU-Digest: this "tax loophole game" by multi-national corporations operating in Europe can only be stopped by coordinated action of EU-member countries and the European parliament. With little or no Government control or established guidelines multi-national corporations are presently exploiting the system to its fullest.
Read more: Starbucks, Amazon, Google face British tax questions | Business & Technology | The Seattle Times
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