FT: “Losing for Tax Purposes”

Interesting piece in FT Alphaville about how companies design transfer pricing strategies. Old news to tax and transfer pricing crowd but interesting to see it get so much press in UK these days.

Here is one part of the illustration, related to Starbucks:


As FT notes:

“The broader issue at play is one of transfer pricing and profit-sharing across tax regimes, and we’ll specifically address this in our next post.

For now, note that if Starbucks UK didn’t pay that £26m in “Royalties and license fees”, it’d get closer to being profitable in the UK, and thereby closer to paying corporation tax. That is, close but not quite.”

FT subscribers can see graphic here:


Carlos Alvarenga

Founder and CEO at KatalystNet and Adjunct Professor in the Logistics, Business and Public Policy Department at the University of Maryland’s Robert E. Smith School of Business.

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