The point is that you have to define "where" the profit was made. In an international environment that's pretty close to insensible (especially since the naive interpretation of profit to the lay person is gross profit).
And I still think that morally there isn't a categorical difference between minimising tax by spending money and minimising tax by ... spending money.
"The point is that you have to define "where" the profit was made. In an international environment that's pretty close to insensible"
Not in the case of a bricks n' mortar business like Starbucks it ain't!
"And I still think that morally there isn't a categorical difference between minimising tax by spending money and minimising tax by ... spending money."
And I don't see what 'by spending money' has to do with anything.
> Not in the case of a bricks n' mortar business like Starbucks it ain't!
Well, two things. First: VAT is designed to capture tax from this exact scenario.
Secondly:
1. The beans are bought from Switzerland.
2. The sale is made in High Street.
Now, to calculate gross profit, deduct Cost of Goods Sold from the Sales.
But: COGS was established in Switzerland.
Sales in Britain.
If you calculate profit as if COGS was established in Britain, you beggar Switzerland.
If you calculate it the other way around, you beggar Britain.
Switzerland has more favourable tax rates. So Starbucks, completely legally, arrange their affairs so that the COGS is done in Switzerland. Otherwise they'd buy from British bean middlemen.
Why is it Switzerland's problem that Britain has the higher tax rates?
Well the beans never actually go to Switzerland, and the bean dealership seems to be there specifically as a tax dodge so... again, morally (as we're talking about here) I'm not sure what the issue is.
It comes down to this - Starbucks operate a chain of coffee shops in the UK. They report to their shareholders that their UK division is a profitable enterprise, they report to the HMRC that it's a loss-maker. Somewhere in between there is probably the truth, and it's that truth the UK should be taxing on.
Why should Starbuck, simply because it is a multinational, enjoy tax breaks that a local/national business does not get?
--edit-- I realise that that isn't a moral question for starbucks, but one for the res of us. The question for Starbucks is 'What is the limit of reasonable behaviour?' and many people consider they've gone far beyond that.
I know you think the limit of reasonable behaviour for a corporation is the same as the limit of the law, so I'll pose the same question to you I posed to someone else downthread -
If it's not (yet) illegal to dump industrial byproducts into the water supply in the country you're operating in, is it moral to do so?
The point is that you have to define "where" the profit was made. In an international environment that's pretty close to insensible (especially since the naive interpretation of profit to the lay person is gross profit).
And I still think that morally there isn't a categorical difference between minimising tax by spending money and minimising tax by ... spending money.