Starbucks has paid nothing in UK corporation tax for the last three years, even though the company made £398 million in sales last year.
Following a Reuters investigation, it emerged that the coffee firm has paid £8.6 million in corporation tax since opening in the UK in 1998.
In comparison, Starbucks' closest rival, Costa, paid £15 million in corporation tax last year after recording £377 million in sales. This accounts for 31 per cent of Whitbread-owned Costa's profits.
Despite its £398 million sales, Starbucks posted a loss of £32.9 million, meaning it is not eligible to pay corporation tax. Indeed, accounts filed with Companies House show Starbucks has made a loss in the UK every year for the last decade.
However, this loss appears to have been created by the company paying fees to other parts of its global business.
Seattle-based Starbucks makes its overseas operations pay a royalty fee of six per cent of their total sales for use of its 'intellectual property'. These payments, which in the UK amounted to £26 million in 2011, reduce the amount of taxable income.
In a statement, the company said: "Starbucks is totally committed to the UK, which continues to be one of our most important markets. We will continue to pay our fair share of taxes to the letter of the law in the UK as we always have.
"This is in keeping with our values as a business, holding ourselves to the highest ethical standards, be it in the way we source our coffee or pay our taxes."
A spokesman added: "We seek to be good taxpayers and to pay our fair share of taxes. We don't write this tax code; we are obligated to comply with it. And we do."
The company has not done anything illegal. However, Starbucks has been criticised as it continually tells investors that the UK is profitable and sales continue to grow, the Reuters report found.
Michael Meacher, Labour MP and tax campaigner, said it was "extremely unfair" that the company has used tax loopholes to avoid paying tax.
He said: "[Starbucks' practice is] profoundly against the interests of the countries where they operate ... they are trying to play the taxman, game him. It is disgraceful."
On its website, Starbucks explains how it goes about being a responsible company. It says: "We've always believed that businesses can - and should - have a positive impact on the communities they serve.
"So ever since we opened our first store in 1971, we've dedicated ourselves to earning the trust and respect of our customers, partners (employees) and neighbours."
A number of companies, including Alliance Boots, Cadbury and Amazon, have been criticised for not paying enough UK corporation tax in recent years.
Last week Facebook also came under fire after it was found the company had paid just £238,000 in UK tax after making an estimated £175 million in sales.