Starbucks evaded $1.3 billion in taxes

Starbucks has been accused of transferring more than $1.3 billion in profits through its Swiss subsidiary over the past 10 years to take advantage of lower tax rates.

Starbucks cups are pictured on the counter at a store in Manhattan, New York - Photo: REUTERS

According to Business Insider , a recent report from the Centre for Corporate Accountability and Transparency (CICTAR) reveals that Starbucks Coffee Trading Company (SCTC), a Starbucks subsidiary in Canton Vaud, Switzerland, has been shifting profits and minimizing its tax payments for over 10 years.

Evidence suggests that since 2015, this subsidiary has moved approximately $1.3 billion of Starbucks' profits out of countries with high tax rates.

This subsidiary was responsible for purchasing unroasted coffee beans from various countries and reselling them at a higher price to other Starbucks branches. This difference increased from 3% to 18% between 2005 and 2014, generating a huge profit margin that was taxed at an extremely low rate in Switzerland.

The report also emphasized that although the coffee was not actually shipped through Switzerland, the profits from these operations were still recorded and subject to significantly lower taxes than in the US and other countries.

Although the exact tax rate that Starbucks pays in Switzerland is not publicly available, according to an analysis by the Institute for Tax and Economic Policy (ITEP), the average US company pays only about 3.9% in taxes in Switzerland, compared to a corporate tax rate of 21% in the US.

In addition, between 2015 and 2021, Starbucks Coffee Trading Company (SCTC) paid annual dividends ranging from $125 million to $150 million to its subsidiary, Starbucks Coffee EMEA BV, based in the Netherlands, and these amounts were not taxed when leaving Switzerland or entering the Netherlands.

Jason Ward, an expert from CICTAR, asserts that while there is no concrete evidence of illegal activities, Starbucks' financial strategy has become the focus of criticism regarding ethics and social responsibility.

"Starbucks is different because they've built an image of being socially responsible," Ward told Business Insider .

In response to these allegations, a Starbucks spokesperson asserted that the company always fully complies with tax regulations in the countries where it operates. Starbucks also stated that its subsidiary (SCTC) is located in Switzerland to leverage the country's expertise in international coffee trading.

The CICTAR report also indicates that similar tax avoidance strategies are being used by many other multinational corporations to minimize their legitimate tax obligations.

Matthew Gardner, a senior fellow at ITEP, stated that "tax evasion by large corporations ultimately increases the tax burden on other taxpayers, including individuals and small businesses."

Source: https://tuoitre.vn/starbucks-tron-1-3-ti-usd-tien-thue-20250312152653325.htm