After $2.7bn Contract Dispute Starbucks Tax Bill Drops to Zero
Well known Coffee Chain Starbucks states it has no pre-tax income due to Compensation Payment
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An arbitrator ordered Starbucks to pay Kraft compensation for deciding in 2010 to terminate a contract which was due to end in March 2014.
Starbucks believes they don’t have any pre-tax income as a result of the arbitration award, thus they do not have a tax obligation this year. For tax purposes, the payment is deductible.
However the coffee chain is still evaluation the ruling to determine the time frame for deductibility.