Starbucks to move its European and MEA head office to London
Starbucks, which has been the focus of some criticism in the UK in recent years for not paying what some argued was its fair share of corporate tax – thanks to its use oftax mitigation techniques – is to move its European, Middle East and Africa head offices to London.
The news was seen by some as a victory for the British government’s efforts to attract multi-national companies to the UK by offering more competitive corporate tax rates than it had done in the past. The rate has fallen to 21%, from 28%, under chancellor George Osborne. A number of other companies have also announced plans to move their headquarters to the UK, or have done so, recently, including Informa, the publishing company.
However, some questioned whether the move would bring any significant additional tax money to the UK Treasury. Accountant and tax campaigner Richard Murphy told the Guardian newspaper that Starbuck’s small head office operation in Amsterdam was little more than a “conduit or moneybox” used by the company to collect royalty payments and move them on to other parts of the group.
“There has never been an intention to make serious profits in the Netherlands, and I am sure there won’t be in the UK,” Murphy added.
In a blog on his website, Murphy elaborated: “The real reason why Starbucks moving is because George Osborne has changed the UK from having a corporation tax system that charged UK-based companies to tax on their worldwide profits to one where he only charges UK companies to tax on the profits that they earn in this country. This is the so-called territorial basis for taxation. This has enormous advantage to a company like Starbucks.”
Seattle, Washington-based Starbucks opened its first European coffee shops in 1998. The UK is its largest and fastest-growing European market.
In a statement, the company said the move would take place before the end of this year, and would “concentrate a modest number of senior executives”, some of whom are currently based in Amsterdam, in its London offices.
“By making this move, our senior leaders will be better able to oversee the UK market, in which over half of our European stores – with more than 7,500 employees – are located.”