Protesters picket Starbucks over tax

Sat, Nov 3, 2012, 00:00

INTERNATIONAL PROTESTS over the tax reduction policies of the US coffee chain Starbucks reached the streets of Dublin yesterday.

The People Before Profit Alliance staged a lunchtime picket outside the franchise’s Dame Street outlet, claiming “loopholes in corporate tax law” allow companies such as Starbucks to minimise their tax liability.

Company accounts filed by Starbucks Coffee Company (Ireland) show it paid less than €40,000 in taxes here between 2005 and 2011 while paying €5.7 million in royalty and licensing fees to its parent company in the same period.

Last month, the news agency Reuters reported, on foot of a four-month investigation, that Starbucks was able to cut its taxes in the UK by paying fees to other parts of its global business, such as royalty payments.

People Before Profit spokeswoman Tina MacVeigh said the low tax yield from Starbucks highlighted Ireland’s “unjust” fiscal and tax environment. “It’s not enough to say by way of justification that these companies are providing jobs, all their profits are being repatriated out of the country. You have to ask: what really is the benefit?”

A Starbucks spokeswoman rejected the criticism, however, saying it had made “significant investments” in the Irish economy, operating 27 stores and employing more than 200 people here. “Over the last three years, Starbucks paid over €2.2 million in various taxes in Ireland, including social security costs and business rates.”

The company accounts show it made a profit for the first time last year of €524,966 on which it paid €34,980 tax. Its turnover was €15.4 million. Only once in the previous six years did it record a tax payment, of just €4,606 in 2008. Its losses that year were €5.5 million yet it still managed to pay €1.3 million in royalties and licence fees to its parent company.