US-based coffee giant Starbucks said today that it will pay around 10 million pounds in corporation tax in Britain in each of the next two years after lawmakers roasted the company for avoiding taxes.
Kris Engskov, the managing director of Starbucks UK, made the announcement in a speech in London amid rising public anger in austerity-hit Britain at multinationals that fail to pay enough tax.
"Today, I am announcing changes which will result in Starbucks paying higher corporation tax in the UK – above what is currently required by law," Mr Engskov said in the speech to the London Chamber of Commerce.
He said that in 2013 and 2014 Starbucks would not claim tax deductions for "royalties or payments related to our intercompany charges".
"In addition, we are making a commitment that we will propose to pay a significant amount of corporation tax during 2013 and 2014 regardless of whether our company is profitable during these years," Engskov said.
"We are still working through some of the calculations, but we believe we could pay or prepay somewhere in the range of pounds 10 million ($16.1 million, 12.2 million euros) in each of the next two years in addition to the variety of taxes we already pay."
Starbucks had previously confirmed that it did not pay any corporation taxes in Britain for the past three years on sales worth 400 million pounds.
It was able to do so by paying fees to other areas of its business -- such as "royalty payments" for the use of the brand -- which resulted in the company posting a series of losses and not having to pay any corporation tax.