Feeds

Google, Amazon, Starbucks are 'immoral' and 'ridiculous' over UK tax

'We don't make any money here' insists milkbar bigwig

High performance access to file storage

Google was invented in America, you know

Brittin's big schtick was to insist that Google was a US company, that Californian innovation came up with the computer science behind the firm's products and so ultimately the profits should go back to the US.

"I wish Google had been invented in Cambridge, I really do," he said.

But the MPs pointed out that the money that ended up in Bermuda wasn't getting back to the US.

"What advantage are your shareholders getting from that money?" Hodge asked.

Brittin also insisted that Google paid all the tax in the UK that it legally owed. Its filings show £2.5bn of UK sales in 2011 but tax of just £3.4m.

"We're not accusing you of being illegal, we're accusing you of being immoral," Hodge retorted.

Starbucks, which has paid £8.6m of tax over 13 years when it had sales of £3.1bn, also faced a grilling from the MPs. Troy Alstead, the firm's chief financial officer, said the company had never made a profit in the UK, a claim the committee was not happy with.

"I'll have to run out right now to Victoria Street and buy a double caramel macchiato, you're doing so badly," Mitchell said sarcastically. "You're either running the business very badly or there's some fiddle on."

The committee wanted to know where the UK money was going if not into profit. Alstead said that the shops paid a royalty rate of six per cent to Starbucks in the Netherlands where the firm has its European HQ and a roastery.

The MPs accused him of manufacturing that rate to move British profits out of the country, a charge Alstead denied, saying that many stores around the world paid the same rate.

When he was asked how much tax the coffee chain was paying in the Netherlands, he refused to say, claiming Dutch authorities wanted that to stay confidential. The committee said that the deal must be a "sweetheart" one if Starbucks and the Dutch tax authorities didn't want to reveal it.

Alstead also talked about buying expensive coffee beans in Swiss trading markets that were then sold on to its shops in the UK. He admitted a 20 per cent markup was put on the already pricey beans. The effective tax rate on the trading companies in Switzerland can be as little as five per cent.

Aside from the tiny amount of tax it has managed to pay in the UK, Starbucks is in the soup for telling analysts in a conference call in 2009 that the UK business was profitable and the firm saying in 2008 that Britain was one of the foreign markets with the best profit margins. It then reported British losses for both years.

All three companies have been asked to give more information to the committee than they were wiling to give publicly. Another executive from Amazon could be called before the MPs in the next two weeks. ®

High performance access to file storage

More from The Register

next story
Android engineer: We DIDN'T copy Apple OR follow Samsung's orders
Veep testifies for Samsung during Apple patent trial
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
One year on: diplomatic fail as Chinese APT gangs get back to work
Mandiant says past 12 months shows Beijing won't call off its hackers
German space centre endures cyber attack
Chinese code retrieved but NSA hack not ruled out
EFF: Feds plan to put 52 MILLION FACES into recognition database
System would identify faces as part of biometrics collection
Big Content goes after Kim Dotcom
Six studios sling sueballs at dead download destination
Ex-Tony Blair adviser is new top boss at UK spy-hive GCHQ
Robert Hannigan to replace Sir Iain Lobban in the autumn
Alphadex fires back at British Gas with overcharging allegation
Brit colo outfit says it paid for 347KVA, has been charged for 1940KVA
Jack the RIPA: Blighty cops ignore law, retain innocents' comms data
Prime minister: Nothing to see here, go about your business
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.