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Starbucks to relocate European HQ to UK: Report

Starbucks said it decided to move its European headquarters to the United Kingdom from the Netherlands following criticism over its low tax payments in Britain last year, The Times reported.

The world's largest coffee chain said the relocation was primarily to get closer to Britain, its biggest and fastest-growing market in Europe, the British daily reported, quoting Starbucks' president of Europe, the Middle East and Africa, Kris Engskov.

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Adam Jeffery | CNBC

Starbucks was not immediately available for comment. Senior executives will transfer to Starbucks' head office in Chiswick, west London, although manufacturing jobs will remain in Holland, The Times said.

Starbucks said it would pay more tax in Britain following the relocation, which it expects to come into effect before the end of the year, although globally its bill would remain "relatively neutral," the paper said.

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A panel of UK lawmakers last year had called on the government to conduct a review of Britain's corporate income tax regime to tackle what it said was a "serious problem of avoidance."

Starbucks had said in June it would pay or pre-pay around £10 million ($16.73 million) a year in taxes in 2013 and 2014, after it was revealed by Reuters that the company paid no tax for the year to Sept. 30, 2012.

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The Seattle, Washington-based group, which is struggling with higher costs for milk and coffee, the two ingredients in its popular lattes, has said that higher costs do not mean customers would have to pay more.

"I want to resist raising prices in this environment," Howard Schultz,Starbucks' chairman and chief executive officer, had said in March, referring to still cautious spending by many consumers.