The US coffee house chain Starbucks in Germany will apparently not pass on savings from the VAT cut that has been in effect since July to its customers. This is reported by the Tagesspiegel with reference to an internal mail to German Starbucks partners. "This means that there will be no changes in sales prices," it says in the email.
AmRest Coffee Deutschland, the operator of almost all German Starbucks branches, bases the decision on the chain's long-term prospects. The company wants to stick to the collective agreement announced in March and comply with the agreed gradual wage increase of an average of five percent per year. "The VAT reduction gives us more flexibility to do this," said the company, according to the Tagesspiegel .
The federal government had decided to cut VAT as part of the economic stimulus package to stimulate domestic consumption in Germany as a result of the corona restrictions. Critics of this measure are now confirmed. It is outrageous that Starbucks is using the reduction to maximize its own profits, said the chairwoman of the parliamentary group of the left, Amira Mohamed Ali. The federal government is responsible for this: Instead of "increasing the profits of tax fraudsters like Amazon and Starbucks", the small and medium-sized companies should be given much more support, she said.
Starbucks tax policy has been criticized for years. In 2014, the EU Commission investigated the accusation that Starbucks was wrongly granted tax breaks in the Netherlands. This is where the parent company of the Starbucks branches in Europe is headquartered, profits from the branches are passed on to them so that they benefit from the low tax rates in the Netherlands - even if the profits were not made there. Tax tricks like this are criticized by many sides, but are legal.
Specifically, the Commission accused the company of buying coffee beans from a subsidiary of its own - at an inflated price to reduce taxable profit. However, the European Court of Justice ruled last year that the practice was not against the law, as no illegal preferential treatment of the group could be proven by the Dutch state. According to calculations by the European Commission, the European Starbucks subsidiary is said to have made only 600,000 euros in taxes on sales of 350 million euros in 2014, which corresponds to a tax rate of just 0.17 percent.