Starbucks pays just €35,000 tax since establishment in Ireland

PhlegmyMoses

UCDVet wrote: »

First - these numbers are hugely misleading.

Second - this was the goal. Countries pass favorable tax laws to get international companies to open offices. Then they complain the big rich companies don't pay enough in taxes? :rolleyes:

That's all well and good for things like call centres and the likes of eBay and Google - the kind of job creation that couldn't happen without them. If Starbucks went tomorrow, independent coffee shops would open and pay reasonable tax rates.

SafeSurfer

Aidric wrote: »

A lot of uninformed if well intentioned bile on this thread. The company has done nothing illegal, rather they have used existing tax arrangements to lessen their liability. This is facilitated by tax policy.

They still contribute positively in terms of creating employment and the offshoots that come with that.

Direct your ire at the policy makers not the businesses which are operating within the law.

You say they create employment. One could say they displace employment in indigenous coffee shops which would, like for like contribute more to the economy.

Zebra3

Aidric wrote: »

A lot of uninformed if well intentioned bile on this thread. The company has done nothing illegal, rather they have used existing tax arrangements to lessen their liability. This is facilitated by tax policy.

They still contribute positively in terms of creating employment and the offshoots that come with that.

Direct your ire at the policy makers not the businesses which are operating within the law.

Nobody claimed they had done anything illegal. :rolleyes:

Their use of the tax laws gives them a huge advantage over small local businesses (which unlike Starbucks will not be shifting their profits abroad).

If i have to pay 50% tax on my wage, Starbucks should be paying a decent percentage on their profits and not be allowed manipulate their figures to show a pretend loss.

People should vote with their feet, boycott Starbucks, and spend their money at locally owned coffee shops.

Greenmachine

Time to call in CAB. Seize the premises, the rights to the name in Ireland, the trade mark, and distribution rights.

R0ot

I think I've paid more than that in my 5 or so years of employment...

SafeSurfer

viztopia wrote: »

Source?

http://www.rte.ie/radio/radioplayer/rteradioweb.html#!rii=0%3A0%3A83%3A%3A&detail=%7B%22latest%22%3Atrue%7D&type=doPlayThis

I'd rather keep our low corporation tax and let the likes of starbucks under the radar than increase it and p*ss of the likes of Intel, Boston scientific and other big multinationals who are keeping half the county in jobs.

enda1

I thought that the franchises to all Starbucks in Ireland were owned by one company which is in fact Irish.

Nulty

Misty Chaos wrote: »

I don't recall seeing any Starbucks cafes when I was in Dublin recently and the only one in Cork that I know of is in Cork Airport.

I don't think Starbucks have much of presence in Ireland as of now.

Jsut set up a new one in Stillorgan within the last 2 weeks

billybudd

Corporations in the global sense are not expected to pay a fair share, they create employment and these slave like creatures pay the tax.

Pottler

SafeSurfer wrote: »

You say they create employment. One could say they displace employment in indigenous coffee shops which would, like for like contribute more to the economy.

I didn't know we had indigenous ones. Anyway Vat is worked out as a factor of vat charged and vat paid out to suppliers etc, so if they're buying in stuff at 21/23% and selling it at 9%, chances are they'll not pay a huge pile to Revenue. And do ye not realise the point of having a LTD Company is that there are quite good Tax breaks/offsets available. It's sort of the idea, really.

kincsem

Misty Chaos wrote: »

I don't recall seeing any Starbucks cafes when I was in Dublin recently and the only one in Cork that I know of is in Cork Airport.
I don't think Starbucks have much of presence in Ireland as of now.

There is one in Blackrock Co Dublin (old post office), and another opened in Stillogan Shopping Centre a few weeks ago. Full of idiots.

Greenmachine

2 on Westmoland st, one on dame street. One in BT2 seen them in some other place too. Airport might be one of them.

househero

SafeSurfer wrote: »

As you can see from the figures they paid a "royalty" of €1.4 million to its parent company in 2009. As has been the case in the UK the royalties charged by the parent company fluctuate to soak up all profit, thus creating a paper loss for taxation purposes in host countries.

Amazing that so many posts ignored the truth (above). Clever business, stupid Irish tax system.

Sulla Felix

God Irish people are stupid. The tax laws here facilitate this kind of behaviour. If you want to get mad, get mad at your local TD and lobby for a repeal of the favourable corporate tax laws.
Starbucks are doing nothing wrong, at least not according to the law. If you want the law changed, stop moaning and get to work.

dudara

Solair wrote: »

AFAIK, Costa is operated by an Irish franchise holder rather than a direct-owned chain like Starbucks.

For the sake of it, Starbucks stores in Ireland are owned and operated by a single Irish franchisee, a company called Entertainment Enterprises. Link to Irish Times article.

suicide_circus

My only problems with Starbucks are the coffee and the price. If they served great coffee then i might ignore the price issue. But they don't serve great coffee, they serve bad coffee. And i don't mean, pretty bad, run of the mill coffee, i mean actually sh1t coffee. Extremely sh1t in fact. It's so piss poor that it's hard to believe how massive they are and how many millions of people chug down their putrid slurry juice every day.

Wils110

5 in blanchardstown shopping centre

awec

The one in Dundrum is always packed too.

opinion guy

So check this out:

http://www.reuters.com/article/2012/11/01/us-starbucks-tax-europe-idUSBRE8A00DP20121101

Summary:

Starbucks told investors its European businesses made a $40 million profit in 2011, but accounts filed for its UK, German, and French units, which make up 90 percent of European revenues, showed a loss of $60 million.

"If you're not finding ways to mitigate your tax responsibilities to the best of your ability, that's something that will impact shareholders," said RJ Hottovy, an analyst who covers Starbucks for Morningstar.
Alstead said that while Starbucks tried to optimise its tax bill, the company followed the rules and was not an aggressive tax avoider.
"Our intent is to be absolutely fair taxpayers everywhere," he said.

Not aggressive???? Fair ????? :eek: What do they call unfair ??? What is aggressive then ? The state pays tax to the company ???:rolleyes:

You know I am all for attracting companies here with low tax rates - as long as the low rates get paid. But this is a feckin joke. These companies are having a laugh. This kind of crap needs to be sorted out.

I was avoiding Starbucks cause I don't like their coffee - now I'm avoiding them for this too.

4zn76tysfajdxp

Starbucks hire people, therefore they can do anything they like.



Anything.

Capt'n Midnight

opinion guy wrote: »

So check this out:

Starbucks told investors its European businesses made a $40 million profit in 2011, but accounts filed for its UK, German, and French units, which make up 90 percent of European revenues, showed a loss of $60 million.

They made a loss ?

Surly the directors could be prosecuted for reckless trading if this continues ?


Anyway they are amateurs as the big US multinationals not only pay no tax they get tax rebates from the US government.

kodoherty93

Capt'n Midnight wrote: »

They made a loss ?

Surly the directors could be prosecuted for reckless trading if this continues ?

Anyway they are amateurs as the big US multinationals not only pay no tax they get tax rebates from the US government.

They make a loss as they see the profit is say €100 million euro. Immediately the company in the Caribbean gets x amount in product licensing which reduces the profits and tax bill.

However I read in the nytimes Starbucks was finding serious difficulty making a profit in Europe as the coffee was expensive and not to European tastes.

Sulla Felix

Can someone who isn't full of moral outrage tell me if there is anything in the tax code that favours the foreign companies or is this something that pretty much any firm, provided it has the bucks to pay for the accountancy research, could do?

opinion guy

Ignacio Most Origami wrote: »

Starbucks hire people, therefore they can do anything they like.



Anything.

Sarcasm ???

Sulla Felix wrote: »

Can someone who isn't full of moral outrage tell me if there is anything in the tax code that favours the foreign companies or is this something that pretty much any firm, provided it has the bucks to pay for the accountancy research, could do?

Only international firms can do this by making use of loopholes in the laws governing how money moves from one country to another. There is even a creative accounting method names after us:

http://en.wikipedia.org/wiki/Double_Irish_arrangement

and you can build on that by using shell companies in countries like the Netherlands:
http://en.wikipedia.org/wiki/Double_Irish_arrangement#Dutch_Sandwich

Sulla Felix

Ok, but an Irish company could do that, no? Set up the dummy corps, register their hq in the solomons or whatever?
We don't have any kind of ... I don't know, forensic branch of the DoF that would try to stop them doing it just because the shareholders/owners are Irish?

AlmightyCushion

Sulla Felix wrote: »

Can someone who isn't full of moral outrage tell me if there is anything in the tax code that favours the foreign companies or is this something that pretty much any firm, provided it has the bucks to pay for the accountancy research, could do?

I'm not an accountant but it looks like they are paying their head office, which is located overseas, a large royalty so that the Irish division posts a very small profit. The division that the royalty is paid to is probably in a country with very low or no taxes. This is technically available to any company regardless of who or where it was set up but I imagine only large companies can properly avail of it. An average person who owns a couple of small coffee shops isn't going to be doing this.

Sulla Felix

Ok, so big companies vs small, rather than specifically Irish ones vs foreign ones. Not being a smartass, wanted to make sure I wasn't misconstruing it.

opinion guy

Sulla Felix wrote: »

Ok, but an Irish company could do that, no? Set up the dummy corps, register their hq in the solomons or whatever?
We don't have any kind of ... I don't know, forensic branch of the DoF that would try to stop them doing it just because the shareholders/owners are Irish?

I don't think so - I think the Double Irish setup is only effective for US companies given the relevant laws between them - thats why its double Irish and not double Spanish or double German or Double Dutch ( :pac: ). Of course if your company is large you can nominally put your headquarters anywhere you want, but AFAIK its mainly used by American companies to avoid US tax liabilities - look at the list of companies on the wiki page.

Sulla Felix

The point I was (probably) driving at, is, aren't there some countries that don't allow native companies to do this kind of stuff. Off the top of my head, I think the French do. I don't just mean foreign companies in France, I mean French companies abroad. They have some law that if a company operating in France does something in their foreign operations that would break French company law, they prosecute them in France and fsck any complaints about how all that stuff we did, well it was in Vietnam.

Maybe not France, but pretty sure one of the EU countries.

ants09

Sulla Felix wrote: »

Ok, so big companies vs small, rather than specifically Irish ones vs foreign ones. Not being a smartass, wanted to make sure I wasn't misconstruing it.

Yes you can if you have a very good accountant/ tax advisor and they know there stuff in relation to double taxation agreements and transfer pricing for one.

opinion guy wrote: »

I don't think so - I think the Double Irish setup is only effective for US companies given the relevant laws between them - thats why its double Irish and not double Spanish or double German or Double Dutch ( :pac: ). Of course if your company is large you can nominally put your headquarters anywhere you want, but AFAIK its mainly used by American companies to avoid US tax liabilities - look at the list of companies on the wiki page.

No its not it depends on criteria thats specific to circumstances of indivual cases

ants09

Sulla Felix wrote: »

The point I was (probably) driving at, is, aren't there some countries that don't allow native companies to do this kind of stuff. Off the top of my head, I think the French do. I don't just mean foreign companies in France, I mean French companies abroad. They have some law that if a company operating in France does something in their foreign operations that would break French company law, they prosecute them in France and fsck any complaints about how all that stuff we did, well it was in Vietnam.

Maybe not France, but pretty sure one of the EU countries.

All company law whether its Irish, British or French is based on EU directives and it's not company law your refering to but tax law.

FreddyKruger

can we safely assume so that if we buy our coffee in smaller franchises or independent coffee shops, we won't endanger local jobs but there will probably be a greater benefit to Revenue ?
i think i just stated the obvious but are there any counter-arguments?

ArmaniJeanss

FreddyKruger wrote: »

can we safely assume so that if we buy our coffee in smaller franchises or independent coffee shops, we won't endanger local jobs but there will probably be a greater benefit to Revenue ?
i think i just stated the obvious but are there any counter-arguments?

No, its not particularly true.
A smaller operation, say a start-up independent coffee shop, is unlikely to be making a profit in its first few years (initial costs of machinery, advertising etc). So it is likely that none of your €3 for a coffee is going to lead to a profit for a year so therefore no profits tax to be paid to the revenue.

GetWithIt

ArmaniJeanss wrote: »

No, its not particularly true.
A smaller operation, say a start-up independent coffee shop, is unlikely to be making a profit in its first few years (initial costs of machinery, advertising etc). So it is likely that none of your €3 for a coffee is going to lead to a profit for a year so therefore no profits tax to be paid to the revenue.

The things you've listed as to why a small independent wouldn't be making a profit actually create other jobs and both directly and indirectly do contribute to Revenue. Creative accounting does not.

FreddyKruger

ok good point
but the starbucks tax avoidance practice is a long-term loss to Revenue, whereas the smaller operation may become profitable eventually and result in a net gain to revenue.
Or can we safely assume that the only exchequer gains from retail is VAT receipts and all Retail profits are eaten up (hidden) by luxury motoring expenses and other creative accounting practices.

ArmaniJeanss

FreddyKruger wrote: »

ok good point
Or can we safely assume that the only exchequer gains from retail is VAT receipts and all Retail profits are eaten up (hidden) by luxury motoring expenses and other creative accounting practices.

Effectively Yes, whether you are Starbucks or MrsMiggins Coffee Shop you will be aiming to minimize your profit. That'll range from MrsM ordering a new kitchen setup the week before end-of-year and asking for the invoice to be dated in the current year up to Starbucks doing some complicated jiggery pokery with double Dutches and Cayman sandwiches.

Edit : As GetWithIt points out the MrsMiggins way is still reasonably better for the local enonomy, but not via Company Profits receipts.

Capt'n Midnight

ArmaniJeanss wrote: »

No, its not particularly true.
A smaller operation, say a start-up independent coffee shop, is unlikely to be making a profit in its first few years (initial costs of machinery, advertising etc). So it is likely that none of your €3 for a coffee is going to lead to a profit for a year so therefore no profits tax to be paid to the revenue.

Starbucks are making a profit otherwise they wouldn't be here. It's just that the profit isn't declared by the local business unit here.

A local operation would be paying close to full price for everything and presumably buying locally. And probably on shorter credit terms so the money gets into the economy faster.

Starbucks would be getting a better volume price from just about everyone apart from it's parent company.



BTW India are suing Nokia for £1.5Bn for transfer pricing.

silverharp

still keeps them ahead of AIB

squod

Capt'n Midnight wrote: »

BTW India are suing Nokia for £1.5Bn for transfer pricing.

lol:D