by Nate Wooley | November 1, 2012 11:42 am
International coffee powerhouse Starbucks (NASDAQ:SBUX) has found itself in hot water in Europe, where several governments are questioning about the company’s habit of reporting profits to its investors while claiming losses on its tax forms.
The European unit of Starbucks is facing questions from tax authorities across the European Union. The firm reported that it made a $40 million profit in 2011, but at the same time, it claimed a $60 million loss on its taxes.
When questioned, Starbucks CFO Tony Alstead replied that different accounting standards are used in the two calculations.
While Starbucks has not yet been accused of breaking any tax laws, the difference equates to tens of millions of dollars in unrealized tax revenue to the U.K., France and Germany.
Starbucks faces a public relations problem in Europe, which is saddled with countless economic woes. Stories in the media and criticism from elected officials are driving public sentiment against the company. For instance, a recent YouGov poll showed that the population of the United Kingdom — where officials also have probed SBUX’s taxes — now holds an overall negative opinion of the company, Reuters reports.
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