Howard Schultz claimed that the coverage “took on a life of its own” and that the Seattle-based coffee giant had been portrayed in “a pretty bad way”.
Starbucks was heavily criticised by MPs and tax campaigners in 2012 when a Reuters investigation revealed that it had paid only £8.6 million in UK corporation tax in the preceding 14 years despite £3 billion in sales, reports The Times.
MPs accused the company at the time of “outrageous” and “immoral” behaviour over accounting practices that included using overseas companies to reduce its taxable profits.
Mr Schultz, who is chairman, president and chief executive of Starbucks, said that people “shouldn’t believe everything you read in a newspaper” over the affair.
He told The Times: “I can tell you unequivocally that we have done the right thing with regards to the tax issue that you are referring to, I promise you that.”
He insisted that Starbucks was committed to paying the right level of tax because it wants to “do the right thing in every aspect of our business”.
Starbucks paid no corporation tax in the UK between 2008 and 2013 because of a lack of profits. It depressed its profitability by paying a royalty fee to a Dutch subsidiary for the rights to use the Starbucks name and coffee recipe.
It also used transfer pricing, buying coffee beans from its Swiss subsidiary at a mark-up, which again helped to minimise its UK tax bill.
Its European head office in Amsterdam is highly profitable as a result of dividends transferred from the coffee-buying unit in Switzerland. However, it pays little tax on these profits thanks to a deal with the Dutch government. That deal is the subject of an investigation in Brussels. The chain has since moved its headquarters to London.
Mr Schultz, who was speaking during EY’s World Entrepreneur of the Year competition in Monte Carlo, said that Starbucks had “social impact and benevolence at its heart”.
Describing the coffee giant’s efforts to help to provide its staff with education, healthcare and stock ownership, he said: “We are a performance-driven organisation through the lens of humanity.”
He attacked President Obama’s administration as being plagued by “inconsistency and lack of leadership”. He added that the American government was “dysfunctional and polarised” and that the country was “suffering a crisis of leadership” that was “fracturing trust”.
Mr Schultz said that businesses must step in to help to tackle intractable social problems. “Our responsibility as business people is not just to shareholders, and not only to our employees and not only to our customers, but to society at large to make it a better place for all of us.”
The 61-year-old said that significant social problems were “not being solved by the people in Washington DC” and that little progress was being made in tackling issues such as racism. “Not only have we not made progress, you could argue we’ve gone backwards.”
Mr Schultz, who is worth an esti- mated $2.5 billion, once told an investor who complained about the company’s support of same-sex marriage that he was free to sell his shares and support a different business instead.
“We will not turn our back on the social problems of America,” he said.
