Coffee giant Starbucks has refused to comment on plans to tackle tax avoidance agreed by G8 leaders in Northern Ireland yesterday (June 18).
Many have found Starbucks' UK tax strategy hard to swallow
A spokeswoman for the firm – which had been widely criticised for the low level of corporation tax it paid in the UK and routing profits through low tax countries – told FoodManufacture.co.uk: “We have no comment on this.”
Leaders at the G8 Summit agreed a 10-point package in a bid to beat the avoidance of corporation tax, illegal tax avoiders and money laundering. The leaders agreed a joint message pledging to move towards an automatic exchange of information between tax authorities to work with the Organisation of Economic Co-operation and Development to facilitate tax transparency. Their aim was to “fight the scourge of tax evasion ”.
‘Play by the rules’
Prime Minister David Cameron told an-end-of-summit press conference: “You have to collect the taxes that are owed. That is only fair for companies and for people who play by the rules.”
Key point of the plan include:
Countries should change rules that allow firms to shift their profits across borders to avoid taxes. Multinationals to report to tax authorities where they have paid tax. Developing countries should have the information and capacity to collect taxes owed to them, supported by other countries, which “have a duty to help them”.
Chancellor George Osborne yesterday unveiled plans to prevent firms hiding their profits in offshore ‘shell’ companies.
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Speaking before the release of the G8 joint statement, Osborne told BBC News: “You’re going to see concreted achievements today on changing the international rules taxation so individuals can’t hide their money offshore and companies don’t shift their profits away from where the profit is made.”
Tackling tax transparency
More progress had been made in tackling tax transparency in the past 24 hours than in the previous 24 years, he added.
Last week Cameron brokered a deal between the UK and its crown dependencies and overseas territories – including the Channel Islands and Gibraltar – which he claimed would result in more transparency about where companies hold their profits.
Dr John Sentamu, the archbishop of York, said on Monday (June 17) that tax avoidance was “sinful” and compared it to robbery. It caused unnecessary suffering in developing countries by denying governments legitimate tax revenues, he said.
“What gives me confidence is that the prime minister has actually called together territories where the Queen has responsibility – some of the them are tax havens – to actually say 'I am afraid you have got to be more transparent and this idea of tax havens does not endanger other countries but yours as well',” he told BBC Radio 5.
Meanwhile, Starbucks, Google and Amazon have all been criticised for aggressively minimising their tax obligations in the UK. But there was no suggestion these companies had acted illegally.
