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Starbucks a novice at tax dodging compared with Shell

Shell’s penchant for tax dodging goes back almost 100 years. In comparison, Starbucks is a mere novice.

QUOTE FROM “A HISTORY OF ROYAL DUTCH SHELL, VOLUME 2

“This elaborate charade would have delighted Deterding who, in an earlier phase of the Group’s history, had excelled in devising convoluted schemes to avoid tax…”

By John Donovan

Starbucks’ £20m gift ‘makes joke’ of tax system

Starbucks has taken the “unprecedented” step of pledging to pay £20m corporation tax, even if it makes no profit – only for the move to appear to backfire and fuel the fiasco surrounding its UK operation. (SOURCE)

Starbucks the coffee conglomerate has negotiated a deal with HMRC to repay £millions siphoned off under the guise of “brand royalties” to an external tax haven. This was in response to a growing backlash from the UK public and calls for a boycott.

The tax dodging scheme which exploited a legal loophole, is similar to the machinations of Royal Dutch Shell who several years ago shifted ownership of Shell trademarks to a Swiss tax haven with the same objective. 

See: Royal Dutch Shell Plc Tax Dodgers: Offshore – and out of reach to the Revenue

We mentioned in our subsequent article that Royal Dutch Shell has a long history as a participant in what the Guardian has aptly described as “the murky world of corporate tax avoidance.” We pointed out that there is nothing new about Shell tax avoidance.

The following is an extract from from pages 78 & 79 of the book “Patents for Hitler” by Guenter Reimann published in 1942.

The story of the secret Oil International would not be complete without referring to Liechtenstein, Europe’s mystery state. Liechtenstein, with its capital, Vaduz, is the most remarkable country in war-time Europe. Situated in Central Europe, almost encircled by the Third Reich, it is the only place in the old world where people feel safe, with unprotected frontiers, with only a few policemen maintaining internal order-in short, an idyllic country. How did it escape Hitler’s armies? With a population of only 12,000, it could never have tried to defend its national existence. But we must not forget that the administration of this tiny state offered hospitality to corporations which sought a neutral centre for private empires, free from the struggle of national states and from taxation. This little country in war-torn Europe had been selected by I. G., by Standard Oil, and also by Shell as one of the centres for the super-national world empires. Its only apparent function is to enable private world empires or large corporations to escape from the risks of war and also from taxation.

In fact, Shell’s penchant for tax dodging goes back almost 100 years. In comparison, Starbucks is a mere novice.

Royal Dutch Shell was hiding profits from trading revenues in 1914.

(Information from pages 217/218 from “A History of Royal Dutch Shell, Volume 1.” – Section headed “Hiding the spoils.” Information also on page 267)

A section on page 294 has the heading “The profits maze.”

Extract

The Group’s tiered structure of holding companies and operating companies billing each other for products and services had created a complex internal accounting system based not on actual cost, but on fictitious prices.”

There are also some interesting terms used in relation to Shell’s accountancy and taxation machinations mentioned in Volume 2, including “creative thinking” (page 157) and “fiscal engineering” (page 202).

Referring to the relevant exercise in”fiscal engineering,” involving Shell Oil in the USA, the following is stated on page 204:

This elaborate charade would have delighted Deterding who, in an earlier phase of the Group’s history, had excelled in devising convoluted schemes to avoid tax…

It went on to say on the same page:

Shell Oil itself came to doubt whether tax inspectors would accept its position trading crude in a carousel with three Group companies.

When Royal Dutch/Bataafche decided to move its headquarters from The Hague prior to the Nazis invasion of Holland, the transfer was made to Curacao rather than to London. It is confirmed on page 453/47 that this surprise decision was made partly for tax reasons.

As I said, Starbucks is a mere novice at tax dodging compared with Shell.

The Royal Dutch Shell Group was built on tax dodging and price fixing.

RELATED ARTICLES 2013

Fox Business News: Shell India In Talks With Tax Men Over Alleged Tax Evasion: 2 Feb 2013

Reuters: Shell’s India unit in tax dispute with authorities: 3 Feb 2013

Rediff: Shell India to challenge tax evasion order: 4 Feb 2013

RELATED ARTICLES 2014

Shell’s disastrous tax dodge: 23 March 2014 (In Alaska)

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