Starbucks pays just €35,000 tax since establishment in Ireland

SafeSurfer

After revelations that Starbucks paid no income tax in the UK last year it has emerged that Starbucks Ireland have paid just €35,000 in tax since establishing a presence in Ireland. This equates to around €5,000 per year, less than a hundred euro a week.

As we look forward to another budget of tax hikes and spending cuts the "we are all in this together" mantra is ringing very hollow.

smash

Can I get the number of their accountant?

Kylo Ren

I paid half that two weeks ago for two coffees and a cookie.

davet82

i dont care once i can bash starbucks in this thread...

stop buying their luke-warm over-priced shíte tasting coffee! :P

Sir Digby Chicken Caesar

how many people do they employ in Ireland?

that is the important number, not how much tax they pay to a bunch of spend happy incompetents.

smash

Sir Digby Chicken Caesar wrote: »

how many people do they employ in Ireland?

that is the important number, not how much tax they pay to a bunch of spend happy incompetents.

No it's not... They should be contributing a hell of a lot more in tax than what their employees pump back into the system!

msg11

Sir Digby Chicken Caesar wrote: »

how many people do they employ in Ireland?

that is the important number, not how much tax they pay to a bunch of spend happy incompetents.

Ah sure that makes it all alright then.. They declare a loss to pay less tax, when in fact there making a profit but again it's grand once there's jobs for the lads.

WoollyRedHat

Sir Digby Chicken Caesar wrote: »

how many people do they employ in Ireland?

that is the important number, not how much tax they pay to a bunch of spend happy incompetents.

If you're going to be like that, let's abolish tax entirely. Woo!

Thoie

Sir Digby Chicken Caesar wrote: »

how many people do they employ in Ireland?

that is the important number, not how much tax they pay to a bunch of spend happy incompetents.

Ah, the Mick Wallace defense. "I only lied and kept the money from the Revenue for the good of the economy".

the groutch

msg11 wrote: »

Ah sure that makes it all alright then.. They declare a loss to pay less tax, when in fact there making a profit but again it's grand once there's jobs for the lads.

the alternative is to change the tax system to make them pay full corpo tax rate, and have them exit the Irish market, leaving us with hundreds of extra people to have to pay the dole and other benefits to.

it's a case of the current set-up being the lesser of two evils.

Sinfonia

"Smithers, why haven't I heard of this 'The Leader'? He's as rich and wicked as I, but he seems to enjoy tax exempt status!"

"Actually, sir, with our creative book-keeping and corporate loopholes we only pay three dollars a year."

"You're right, we're getting screwed!"

WoollyRedHat

The only thing I'll give to Starbucks is that it's nice and comfy. Otherwise, it serves awful coffee and is tax-evading ( efficient).

Logical Fallacy

Sir Digby Chicken Caesar wrote: »

how many people do they employ in Ireland?

that is the important number, not how much tax they pay to a bunch of spend happy incompetents.

lol

that is all.

Misty Chaos

I don't recall seeing any Starbucks cafes when I was in Dublin recently and the only one in Cork that I know of is in Cork Airport.

I don't think Starbucks have much of presence in Ireland as of now.

SafeSurfer

the groutch wrote: »

the alternative is to change the tax system to make them pay full corpo tax rate, and have them exit the Irish market, leaving us with hundreds of extra people to have to pay the dole and other benefits to.

it's a case of the current set-up being the lesser of two evils.

I don't agree with you at all. If we follow your logic why not abolish all corporate tax, allow child labour and lift all environmental regulations on any firms employing people?

Starbucks, by creative tax avoidance, made possible by their multinational organisation, have an unfair advantage over domestic, small coffee shops and cafes. If Starbucks were forced to pay a realistic amount of tax on their turnover and decided to exit the Irish market, their unemployed workforce would find employment in small domestic coffee shops that would expand and be newly created to fill the vacuum created by their departure.

Floodric

Misty Chaos wrote: »

I don't recall seeing any Starbucks cafes when I was in Dublin recently and the only one in Cork that I know of is in Cork Airport.

I don't think Starbucks have much of presence in Ireland as of now.

They're in every major shopping center and there's a few in Dublin city

Misty Chaos

Misty Chaos wrote: »

I don't recall seeing any Starbucks cafes when I was in Dublin recently and the only one in Cork that I know of is in Cork Airport.

I don't think Starbucks have much of presence in Ireland as of now.

There is quite a few.

Merkin

Storbucks coffee is totally ming - a skinny latte is normally 50% froth and the rest rotten coffee.

The tax they pay isn't a big surprise, I am sure Facebook, eBay and any other number of companies are paying small amounts as well. Hardly a surprise tbh.

UCDVet

First - these numbers are hugely misleading.

Second - this was the goal. Countries pass favorable tax laws to get international companies to open offices. Then they complain the big rich companies don't pay enough in taxes? :rolleyes:

Solair

It's possible that Starbucks Ireland hasn't made significant profits. They spent a lot of money getting into the market here and also had to close a number of stores a couple of years ago that were possibly sited in areas that didn't work out as well as anticipated.

You only pay tax on profits, not on turnover. So, if the Irish subsidiary has only paid a small amount of tax, it's likely that it hasn't been profitable (yet) due to the major investment that was spent on new stores etc in the first few years.

They would have definitely paid a considerable amount more in terms of employer contributions to the PAYE and PRSI system though not to mention lots of VAT.

Starbucks UK's expansion was really aggressive, so it's possible they're not making all that much profit either and it was all about increasing street presence and thinking long-term.

In the USA they opened WAY too many stores and ended up having to close loads of them too.

edanto

SafeSurfer wrote: »

I don't agree with you at all. If we follow your logic why not abolish all corporate tax, allow child labour and lift all environmental regulations on any firms employing people?

Starbucks, by creative tax avoidance, made possible by their multinational organisation, have an unfair advantage over domestic, small coffee shops and cafes. If Starbucks were forced to pay a realistic amount of tax on their turnover and decided to exit the Irish market, their unemployed workforce would find employment in small domestic coffee shops that would expand and be newly created to fill the vacuum created by their departure.

You're so right. Our government is making it harder for Irish SMEs - the lifeblood of our economy - by creating an environment in which companies that can afford expensive accounting firms pay less tax.

I'll be boycotting Starbucks from here on out, I'll try to convince Mrs Edanto from darkening their door for a frappalottochino. We'll be supporting Irish coffeehouses.

Speaking of which - was in a great little cafe/restaurant/shop the other day called the Happy Pear in Greystones. Owned by two brothers, and full of great food, lovely atmosphere. I bet they have paid more than e35k in tax over the years!

I'm proper angry at Starbucks now - can't believe they've been fiddling their tax and not paying what they should.

Shame on anyone that knows this and gives them any business.

smash

SafeSurfer wrote: »

I don't agree with you at all. If we follow your logic why not abolish all corporate tax, allow child labour and lift all environmental regulations on any firms employing people?

Na, children make worse coffee than Starbucks do!

Solair

There are also a lot of decent Irish coffee outlets. Some of the independent ones are absolutely excellent and Insomina and O'Briens make excellent coffee.

In terms of international chains, I prefer Costa's coffee to Starbucks. It's much stronger and generally nicer.

AFAIK, Costa is operated by an Irish franchise holder rather than a direct-owned chain like Starbucks.

super_furry

Isn't Starbucks struggling in Ireland? Seem to remember reading something about them being surprised that they haven't taken off here at all.

Much prefer Insomnia coffee myself, even if it is always a bit too hot.

Solair

super_furry wrote: »

Isn't Starbucks struggling in Ireland? Seem to remember reading something about them being surprised that they haven't taken off here at all.

Much prefer Insomnia coffee myself, even if it is always a bit too hot.

Starbucks launched way too late in Ireland. The coffee culture buzz had already taken off and other operators had established and were producing better coffee.

I don't think Irish people were as 'wowed' by Starbucks as the company was expecting.

I don't think the economy had anything to do with it either. They just got here too late to make an impact.

super_furry

http://www.qualitybusinessalliance.ie/blog/starbucks-struggling-in-irish-market/ this is from last year but I still don't think they've actually made a profit here, which may explain why they're paying so little tax.

Solair

super_furry wrote: »

http://www.qualitybusinessalliance.ie/blog/starbucks-struggling-in-irish-market/ this is from last year but I still don't think they've actually made a profit here, which may explain why they're paying so little tax.

You can have lots of street presence, turnover and a big brand name and actually be making very little money.

Corporation tax isn't on turnover, it's on profits.

SafeSurfer

UCDVet wrote: »

First - these numbers are hugely misleading.

Second - this was the goal. Countries pass favorable tax laws to get international companies to open offices. Then they complain the big rich companies don't pay enough in taxes? :rolleyes:

Why are these numbers hugely misleading?

Solair wrote: »

It's possible that Starbucks Ireland hasn't made significant profits. They spent a lot of money getting into the market here and also had to close a number of stores a couple of years ago that were possibly sited in areas that didn't work out as well as anticipated.

You only pay tax on profits, not on turnover. So, if the Irish subsidiary has only paid a small amount of tax, it's likely that it hasn't been profitable (yet) due to the major investment that was spent on new stores etc in the first few years.

They would have definitely paid a considerable amount more in terms of employer contributions to the PAYE and PRSI system though not to mention lots of VAT.

Starbucks UK's expansion was really aggressive, so it's possible they're not making all that much profit either and it was all about increasing street presence and thinking long-term.

In the USA they opened WAY too many stores and ended up having to close loads of them too.

Here is a link to an article about Starbuck's tax affairs in the UK.

http://www.channel4.com/news/starbucks-coffee-income-tax-uk

They have not paid any tax in the UK since 2009 on a turnover of £1.2 billion stg. Its nearest rival Costa Coffee paid £15 million tax on a turnover £377 million in 2011 alone, representing 31% of profits. Furthermore:

In the 2007 financial year to end-September, accounts filed by Starbucks's UK unit showed its tenth consecutive annual loss. But that November, Chief Operating Officer Martin Coles told analysts on the fourth-quarter earnings call that the UK unit's profits were funding Starbucks's expansion in other overseas markets.

So its not a case that they are not profitable.

Its all the more galling from a firm that constantly harp on about fair trade and social responsibility. They have a whole page on their website about responsibility http://www.starbucks.ie/ Just pay your taxes like the rest of us.

namloc1980

edanto wrote: »

I'm proper angry at Starbucks now - can't believe they've been fiddling their tax and not paying what they should.

How do you know they've been, as you put it, "fiddling their tax"? Any evidence to support this allegation??

Heroditas

super_furry wrote: »

Much prefer Insomnia coffee myself, even if it is always a bit too hot.

Did Bobby Kerr ever pass on the VAT cut to customers?

starviewadams

Just taking advantage of the taxation system that's in place here.Why pay a cent more tax then you legally have to?

Any business would do the same.Don't blame Starbucks,blame the Government.

SafeSurfer

super_furry wrote: »

http://www.qualitybusinessalliance.ie/blog/starbucks-struggling-in-irish-market/ this is from last year but I still don't think they've actually made a profit here, which may explain why they're paying so little tax.

As you can see from the figures they paid a "royalty" of €1.4 million to its parent company in 2009. As has been the case in the UK the royalties charged by the parent company fluctuate to soak up all profit, thus creating a paper loss for taxation purposes in host countries.

super_furry

Heroditas wrote: »

Did Bobby Kerr ever pass on the VAT cut to customers?

No but when you can get any coffee and any sandwich - which are actually decent - for a fiver, I'm pretty happy.

Heroditas

super_furry wrote: »

No but when you can get any coffee and any sandwich - which are actually decent - for a fiver, I'm pretty happy.

If he passed on the VAT reduction, they'd be even cheaper.

admiralofthefleet

i dealt with starbucks years ago just before they set up here. at the time they didnt even have an irish head office. they used an address in london, like for example
starbucks ireland limited
oxford street london
united kingdom

they should be paying 9% (and 13.5% before the reduction) and should be told to cough up provided they are in the wrong

Thinkingaboutit

Maybe no one is drinking their horrible coffee. Probably wrong though.

namloc1980

admiralofthefleet wrote: »

they should be paying 9% (and 13.5% before the reduction) and should be told to cough up provided they are in the wrong

Huh? Those are VAT rates and "coughing up" is not how VAT works for any business, big or small.

SEPT 23 1989

Each of those shops have to pay rates which could be up to 50,000 a year

namloc1980

SEPT 23 1989 wrote: »

Each of those shops have to pay rates which could be up to 50,000 a year

And VAT, PRSI, PAYE, water rates etc. The amount they pay in taxes is alot more than €35k which is just the corporation tax.

Balmed Out

What annoys me is that you can be sure the Irish companies competing with them are paying a lot more in taxes.

admiralofthefleet

namloc1980 wrote: »

Huh? Those are VAT rates and "coughing up" is not how VAT works for any business, big or small.

9% is the tax businesses (such as cafe's) charge on products they sell

Lumbo

After revelations that Starbucks paid no income tax in the UK last year it has emerged that Starbucks Ireland have paid just €35,000

Go team Ireland

namloc1980

admiralofthefleet wrote: »

9% is the tax businesses (such as cafe's) charge on products they sell

That's VAT. They don't just hand that over that 9% (or 13.5% or 23%), no business does. That's not how VAT works.

admiralofthefleet

namloc1980 wrote: »

That's VAT. They don't just hand that over that 9% (or 13.5% or 23%), no business does. That's not how VAT works.

the 9% charged is meant to be paid to the revenue in tax returns. do you think they hang on to it for themselves

as people have said you have to actually make a profit to pay tax. companies can accumulate losses for the purposes of corporation tax so you only pay tax when the company makes a profit taking into account previous losses.

on the royalty payments a certain level of royalty payments back to the home franchise is reasonable and we don't know if that's the case in Ireland.

in any case, in this environment better a starbucks cafe paying workers wages, prsi and vat, rent and supporting other businesses in the economy for shop-fit-out, cleaning servces etc etc. than an empty unit for rent....

namloc1980

admiralofthefleet wrote: »

the 9% charged is meant to be paid to the revenue in tax returns. do you think they hang on to it for themselves

No it's not meant to be paid over. You need to understand how VAT works. It definitely isn't what you think it is

Thankfully there's only one Starbucks in Galway and all they got was a café on campus in NUIG. Heck at one point, the McDonald's in Shop Street was pretty much the only one not making much money. That was a few years ago so it could have changed.

viztopia

SafeSurfer wrote: »

After revelations that Starbucks paid no income tax in the UK last year it has emerged that Starbucks Ireland have paid just €35,000 in tax since establishing a presence in Ireland. This equates to around €5,000 per year, less than a hundred euro a week.

As we look forward to another budget of tax hikes and spending cuts the "we are all in this together" mantra is ringing very hollow.

Source?

ToddyDoody

Starbucks. Pick hype words, put two of the more significant ones together, add a feminine mythological marketing symbol. Boil s fancy kettle.

Aidric

A lot of uninformed if well intentioned bile on this thread. The company has done nothing illegal, rather they have used existing tax arrangements to lessen their liability. This is facilitated by tax policy.

They still contribute positively in terms of creating employment and the offshoots that come with that.

Direct your ire at the policy makers not the businesses which are operating within the law.

super_furry

Yeah but their coffee is warm slop.