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Starbucks to move European HQ to UK

image captionStarbucks said the UK was its fastest growing and largest market in Europe

Starbucks is to move its European head office from Amsterdam to London by the end of the year, following a row over corporate tax avoidance.

"This move will mean we pay more tax in the UK," the company said.

The relocation will concentrate a "modest number of senior executives" in its London operation.

The US coffee giant said its leaders would "better oversee the UK market" from the capital, adding that the UK was its largest European market.

Last year, Starbucks paid £5m in corporation tax, its first such tax payment since 2009.

The move followed pressure from politicians and campaigners.

Part of the tax avoidance row centred on Starbucks transferring money to its Dutch sister company in royalty payments.

Starbucks' chief financial officer told a committee of MPs in 2012 that a tax deal struck with Dutch authorities had been "an attractive reason" for basing operations there.

Targeting tax

Heather Self, director of tax at legal firm Pinsent Masons, told the BBC that more tax paid in the UK would probably mean less tax paid by the company elsewhere.

"They're not going to create a bigger tax bill for the group as a whole," she said.

Collecting tax from global companies is a complex issue for governments.

Ms Self said firms should not be taxed twice on the same income, but it is reasonable for governments to expect companies to pay tax somewhere.

"The question is not necessarily what's moral and what's not, but is the tax following the real economic activities?" she added.

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