Starbucks, tax and cluelessness

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Starbucks claims to have paid £8.1m in corporation tax at a rate of 24% last year. But as the Guardian noted I had this to say:

Tax accountant Richard Murphy said it was impossible to know if Starbucks was still aggressively avoiding tax until accounts for its European parent company, Starbucks EMEA, are published.

“The company is declaring a profit and appearing to pay a fair tax rate on it but the fact is we have no clue whether the profits on which tax is paid are fairly stated.

“So we have no clue what royalties are being paid to related companies, what use Starbucks is still making of tax havens and whether as a result fair tax is being paid on fairly stated profits in the UK.

“If companies like Starbucks are going to claim to pay fair tax they have to realise it’s a lot more complicated than calculating a percentage tax rate. It’s showing that the profit is right that is now the critical issue and Starbucks are nowhere near doing that.”

Murphy called on Starbucks to join the Fair Tax Mark scheme, of which he is a director, a watermark system for companies that pay their share to the exchequer.

We have a long way to go yet to get tax transparency.

That is why I am calling for Tax Reporting Standards. Only when we have them will we really know what is going. Right now companies rely on giving partial information and hope they can get away with things by leaving us clueless. In 2015 that is no longer good enough.