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

SafeSurfer · 17-10-2012 05:27PM #1

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 · 17-10-2012 05:28PM

Can I get the number of their accountant?

Kylo Ren · 17-10-2012 05:30PM

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

davet82 · 17-10-2012 05:31PM

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 · 17-10-2012 05:31PM

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 · 17-10-2012 05:33PM

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 · 17-10-2012 05:33PM

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 · 17-10-2012 05:33PM

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 · 17-10-2012 05:35PM

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 · 17-10-2012 05:41PM

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 · 17-10-2012 05:42PM

"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 · 17-10-2012 05:43PM

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 · 17-10-2012 05:43PM

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 · 17-10-2012 06:14PM

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 · 17-10-2012 06:21PM

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 · 17-10-2012 06:23PM

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

17-10-2012 06:28PM

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 · 17-10-2012 06:31PM

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 · 17-10-2012 06:40PM

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 · 17-10-2012 06:40PM

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 · 17-10-2012 06:43PM

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 · 17-10-2012 06:45PM

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 · 17-10-2012 06:46PM

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 · 17-10-2012 06:47PM

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 · 17-10-2012 06:49PM

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 · 17-10-2012 06:51PM

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 · 17-10-2012 06:58PM

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 · 17-10-2012 06:58PM

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 · 17-10-2012 06:59PM

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 · 17-10-2012 07:01PM

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 · 17-10-2012 07:03PM

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.

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

Comments