SBUX: Starbucks to Relocate European HQ After Tax Spat

by Christopher Freeburn | April 16, 2014 10:26 am

After being hit with criticism from British lawmakers over alleged tax avoidance, Starbucks (SBUX[1]) says it will transfer its European headquarters to London[2].


According to SBUX, it will complete the migration of its headquarters for Europe, Middle East and Africa from the Netherlands to the U.K. by the end of this year.  While a SBUX spokesperson indicated that the overall tax impact of the move will be “largely neutral” with SBUX continuing to pay a global effective tax rate of roughly 34%, relocating the headquarters to London will increase its U.K. tax payments, the Financial Times notes.

SBUX became a focus of controversy after Reuters published an analysis showing that it paid just £8.6m in British corporate taxes between 1998 and 2012. SBUX also allegedly reported losses from its U.K. operations to tax authorities[4], while telling investors that they were profitable.

The relocation of Starbucks’ European headquarters to London will see some executives transferred from Amsterdam. However, roasting and distribution operations will remain in the Netherlands.

In Wednesday morning trading, SBUX stock gained more than 1%. Starbucks stock has risen more than 17% over the past 12 months.

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