Starbucks Expects to Pay ‘Significant’ U.K. Taxes

Exec says company will pay corporation taxes whether or not it’s profitable.

Starbucks Corp. said it will pay “a significant amount” of corporation tax in the U.K. in 2013 and 2014 after the world’s largest coffee-shop operator came under fire by lawmakers for not paying any corporation tax there.

“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,” according to the text of a speech to be given today at the London Chamber of Commerce by Kris Engskov, managing director of Starbucks U.K. “We are still working through some of the calculations, but we believe we could pay or prepay” about 10 million pounds ($16.1 million), he said.

Starbucks, which has been closing underperforming stores in the U.K. this year, has pledged to build trust in the nation after being criticized by British lawmakers for not paying any tax for the past three years. There has been no suggestion that Seattle-based Starbucks has broken the law. The company has about 760 stores in the U.K.

Starbucks will not claim any tax deductions for royalties in the U.K. in 2013 and 2014 and will pay more than is required by law, according to the speech. In the past three years, the company has paid more than 160 million pounds in employee, national insurance and business rates tax, Engskov said in a statement in October. Inc. and Google Inc. have also been admonished by British lawmakers for using complex accounting methods to minimize tax liabilities in the U.K. while running large operations in the country.

Starbucks has more than 18,000 stores worldwide.


Bloomberg News

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