And Ritchie is ignorant

“So we have no clue what royalties are being paid to related companies, what use Starbucks is still making of tax havens and whether as a result fair tax is being paid on fairly stated profits in the UK.

But we do know what royalties are being paid. The EU investigated this. And noted that Starbucks charged its own stores the same royalty rate as it charged franchisees.

As, under transfer pricing rules, it is supposed to do.

As an expert in international taxation would know and note.

10 thoughts on “And Ritchie is ignorant”

  1. Of course HMRC know because Starbucks has to tell them. Has Murphy forgoptten who his paymasters are? Or has the taxmen’s union stopped paying him?

  2. Given how long international transfer pricing and the associated tax rules have been around I’d have thought it’s a pretty barren area for finding exploitable loopholes by now, especially as it’s something you know the tax people are going to scrutinise.
    The valuation of intangibles has been an issue for a long time, but accounting standards are tightening and making this more regulated and the tax authorities can always dispute the value. The amount to be charged to individual business components may well be more of an issue, but again you have to justify the basis so not a lot of scope I’d have thought for divvying up the pot in creative ways without falling foul of the tax authorities under existing transfer pricing rules.
    I’m still not sure how Murphy expects country by country reporting to work with these sort of allocations though, then again he doesn’t seem to do details only ‘big thoughts’.

  3. @jgh

    Oh come on – expecting the accounts to show a true and fair account? That’s just neoliberal sophistry.

  4. It’s the royal “we”. When he says that “we haven’t got a clue”, he actually means that he hasn’t got a clue.

    Which is true, after all.

  5. And if you think royalties are just some sort of tax dodge, try opening a coffee bar next to Starbucks and see how it goes. After all, you will have a cost advantage by not paying them……

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