Starbucks Promises to Pay More U.K. Tax
After weeks of growing public outrage, Starbucks announced today in an open letter that it will pay corporate taxes in the United Kingdom for the first time in three years.
Kris Engskov, Managing Director of Starbucks' U.K. division, wrote that the coffee company will pay "above what is currently required by tax law" by not claiming tax deductions for royalties and standard intercompany charges.
Starbucks has operated stores in the U.K. for more than 14 years, but has found profit-making elusive in the country's competitive coffee market. Speaking on behalf of Starbucks, Engskov wrote:
We annually inject nearly £300 million into the UK economy and are exploring additional initiatives to expand our growth and speed our way to profitability in future.
In FY 2012, the company operated 593 shops in the U.K., just over 6% of its 9,405 stores worldwide. It opened five stores in FY 2011, but closed seven last year. In the company's latest annual report, non-U.S. sales accounted for just 30% of total sales.
The article Starbucks Promises to Pay More U.K. Tax originally appeared on Fool.com.Justin Loiseau has no positions in the stocks mentioned above and sometimes drinks coffee. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, TMFJLo.The Motley Fool owns shares of Starbucks and has the following options: short JAN 2013 $47.00 puts on Starbucks. Motley Fool newsletter services recommend Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.