COCA-COLA will pay tax on revenues derived from the Olympics despite its entitlement to tax breaks.
The move follows a similar step taken by fast food giant McDonald’s yesterday after campaign group 38 Degrees collected more than 150,000 signatures urging sponsors to waive their rights to the relief.
While British Airways said the break was not applicable to UK companies, corporations including Visa and Adidas currently stand to augment profits they make from the Games.
Foreign nationals, including the athletes themselves, judges, journalists and any other international workers associated with the Games, are also entitled to take advantage of the relief.
The Olympic Park will essentially serve as a tax haven for the duration of the tournament due to special tax rules that formed part of the original bid. As a result, sponsors could pay no tax at all on earnings generated in the Olympics.
In a statement posted on its website, Coca-Cola said: “Coca-Cola has never intended to, and will not be making, any corporate or income tax exemption claim with respect to any activity concerning our involvement with the London 2012 Olympic and Paralympic Games.
“More than 90% of the Coca-Cola employees working at the Olympic and Paralympic Games are UK nationals. Those from abroad will be paid by their respective home countries.”
UPDATE 31/7/2012: It has since come to Accountancy Age‘s attention that the announcements from Olympic sponsors Coca-Cola and McDonald’s that they would waive tax breaks were not as they first appeared, as they were not entitled to them in the first place.
All UK-resident sponsors are liable to UK corporation tax in the normal way, meaning McDonald’s UK, Coca-Cola, Adidas and Visa cannot claim the tax exemption because they are UK-resident.
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