
Those of us who assumed that there was something dubious about the world's most famous purveyor of milky hot drinks (it calls itself a coffee specialist) have discovered that there is also something dubious about Starbucks' tax arrangements.
Starbucks is under fire in Britain for paying no corporate tax in the past three years despite sales of £1.2 billion (HK$15 billion). Starbucks says it paid no tax because it made no money. Yet it has consistently told shareholders its British operations are profitable.
The "losses" stem from complex intra-company arrangements where very high charges are levied against earnings in the form of royalties and the parent company receives high loan repayment fees from the British operations.
It is not alleged it has engaged in tax avoidance, which is illegal, but that it has focused the efforts of its accountants on tax avoidance.
Donald Johnston, ex-head of economic watchdog OECD says tax avoidance is harder to identify, but draws a distinction between "unacceptable tax avoidance" and "acceptable tax planning". However, this is far from a precise definition.
Some people argue that paying taxes is a social responsibility - the price citizens pay to keep policemen on the streets, schools open, roads built and so on.
But the more extreme advocates of the free market believe that all taxation is theft, and contributes to excess government and controls.