The Starbucks activity in France is equalized. The traffic, since the height reached two years ago, is decreasing (see pictures below). Explanation: several booths are closed (Alesia and Saint-Andre-des-Arts in Paris). As for the net result, after being positive for two years in a row, it has fallen red during the year ending at the end of September 2017, due to the depreciation of several stores.
On the other hand, nothing is changed on the fiscal side: the French branch continues to not pay the tax on profits by the French tax authorities. Indeed, since its installation with us in 2004, the American was only two years old. Even during those two years in which he was a beneficiary, he escaped from a tax on profits thanks to a tax niche that allows, in calculating the profit tax, to deduct losses recorded in previous years. In the jargon of tax experts, this is called "tax loss transfer". At the end of September 2017, these tax losses amounted to 51.9 million euros, which corresponds to cumulative losses recorded in France from the beginning. At this course, the French branch will not pay a profit tax for a long time.
Artificially increased losses
However, CEO Hovard Schultz worked well published in 2011, French activities became profitable … The question is, therefore, whether the losses made in France are real or, on the contrary, artificially inflated so as not to publish profits, and therefore do not pay taxes on profits.
This is the opinion of the French tax authorities, who informed in the French subsidiary, an adjustment covering the years 2004 to 2013. The branch decided to pay part of it, but to counter all harmonization.
In practice, tax authorities consider fictitious almost all reported losses, and therefore tax losses. For example, at the end of 2008, the tax transfer tax amounted to EUR 24.7 million, but the tax challenged EUR 23.8 million. In other words, tax adjustment "would make the company taxable," Starbucks reports. Recently, tax authorities launched another review for the years 2015 to 2017.
Rook your bills
In particular, in order to degrade its profitability in France, Starbucks deliberately subverts its bills by paying many taxes and fees. First, the French branch has to pay a license for a variety of things: a brand, a logo, a business plan, recipes, furnishing, a store appearance and even an "atmosphere that has published it" … In general, these revenues from the author amount to 6% of the total turnover from 50 million euros from the installation in France.
In its early years, the dependent company had to pay a fee (in the amount of 2% of turnover) in order to receive "management assistance". He also paid fees for computer software, legal aid, training …
In addition, it has to repay the parent company a lump sum of $ 25,000 at the opening of each store, or about $ 2 million cumulated from the beginning.
In addition, it has to be financed by borrowing money, not from a bank around the corner, but from a branch of a group headquartered in the Netherlands, Starbucks coffee EMEA BV. In 2016, the French subsidiary borrowed EUR 6 million, and the three-month Euribor rate increased by 2.5%. For comparison, the parent company has a much cheaper credit line (Libor plus 0.565%).
In the end, all stores are obliged to buy coffee, tea, glasses, food or towels from a Dutch company, Starbucks Manufacturing EMEA BV. She is also responsible for baking cereals consumed in Europe.
Low taxes in the Netherlands
But again, the profitability of this Dutch company is deliberately sealed to reduce the tax paid to the tax authorities of the Batai. First, it has to pay fees for using the method of baking – approximately, the temperature and the duration of cooking … And these fees are deducted from income tax in the Netherlands and exempt from dividend tax.
Then, this Dutch company has to buy coffee in another subsidiary, this time Swiss, invited Starbucks Coffee Trading SARL. The other is negotiating the purchase of cereals for stores around the world, but does not physically transfer them to their home. For this reason, since 2011, it charges a margin of 18%. This margin is officially justified by the application of ethical rules in the purchase of coffee: respect for the environment and social rights by farmers.
Better yet, the Swiss subsidiary uses sweet Swiss taxation, which makes it possible to pay very little sales tax outside Switzerland. The result: between 2011 and 2014, the Swiss branch never paid more than 20 million Swiss francs in taxes a year, while its turnover reached one billion Swiss francs, and pre-tax profits exceed 100 million Swiss francs.
Brussels recalls its attention
In 2014, the European Commission renewed this tax optimization tax package and was considered illegal. According to her, the purchase price of beef coffee in the Swiss branch is "over-inflated", additional costs attributable to the ethics program are not 18%, but 6%. And the fees paid for cooking are "very high".
Brussels also found that copyrights on the brand and method of baking were agreed upon by the British company, Alki LP, owned by the Dutch branch itself, Emerald Citi CV. According to Brussels, Alki LP so he received more than 400 million euros of license fees between 2008 and 2014. And all of this money was not imposed either in the UK or in the Netherlands, and went directly to the United States.
For Brussels, all this was done with the complicity of the Dutch tax authorities, who in 2008 concluded a concrete agreement (in English or in English). reigning) with an American channel. In total, this has "artificially reduced" the tax paid by the Netherlands tax from 20 to 30 million euros during the period 2008-2014. Therefore, Starbucks Manufacturing EMEA BV has always paid less than a million euros of tax annually, and a turnover of 350 million euros for the year ending September 2014.
In October 2015 Brussels therefore done in the Netherlands to recover millions of euros of taxes that were not collected. The decision made by the Netherlands and Starbucks in appeals (the proceedings are still pending). At the same time, Starbucks sold it Alki LP and establish a new organization. From now on, copyright is landing in the UK branch, Starbucks EMEA doo, which earned $ 227 million and a net income of $ 207 million for the year that ended on October 1, 2017.
When asked by Starbucks, he replied that "they pay all their taxes, as we have always done, cooperate with the French tax authorities when it comes to resolving issues related to our taxation."