British lawmakers grilled global coffee giant Starbucks over its tax policies on Monday, arguing that claims that its British division was unprofitable “just doesn’t ring true”.
The Public Accounts Committee – a panel of British lawmakers – also put top managers from US online retailer Amazon and Internet search giant Google under the spotlight over the amounts of tax paid in Britain.
Troy Alstead, Starbucks global chief financial officer, told lawmakers that the chain was “an extremely high tax payer” globally and denied tax avoidance.
Starbucks has already confirmed it has not paid any corporation taxes in Britain for the past three years owing to fees paid to its businesses in the Netherlands and Switzerland, including royalties for brand usage.
Margaret Hodge, a Labour party deputy who chairs the committee, asked Alstead why a previous finance chief said Starbucks UK had an operating profit rate of 15 per cent in 2007 – when it also posted a loss.
“It is hard for the ordinary person to believe it’s fair,” Hodge told the Starbucks executive.