Financial services and technology companies aren’t the only ones that use low-tax Ireland as a hub through which to divert sales from across the globe. Recent filings in the Companies Registration Office (CRO) show that titans of the traditional, tangible economy also use the Republic as a vital cog in their tax planning.
Ireland is beginning to boom again, and while it is true that some of our denizens appreciate the finer things in life, the near €1 billion in sales recorded last year by the Irish arm of Bulgari, the Italian jewellery giant whose products were made famous by Elizabeth Taylor, certainly cannot be attributed to luxury-loving locals.
Bulgari Ireland was at the centre of a tax probe by Italian authorities a few years back. That has since been settled, although the company has always denied wrongdoing. It routes almost all of its European and Asian sales through Dublin.
The company recorded profits of €59 million last year and paid tax of €8.5 million, after kicking a dividend of €35 million upstairs to its Italian parent. The company is registered at the Dublin offices of the law firm Matheson, the biggest corporate tax adviser in the State.
Meanwhile, the Dublin-registered Kellogg Europe Trading (KET) also recently reported to the CRO for 2015, with sales of €1.3 billion but losses of €65 million. We could never consume that many cornflakes here, even munching the stuff for breakfast, lunch and dinner. Most sales come from the UK and Europe.
KET has accumulated total losses of €680 million, which its accounts attribute to “interest on loans from group entities”.
The Kellogg group has a significant trading operation on the northside of Dublin city, but KET is registered to a small office on the southside, along with about 136 other unrelated companies.
Ireland, it appears, is the location of choice for savvy companies of all shapes and hues – the European hub of hubs for multinationals with efficient structures.
Perhaps it is no wonder our European neighbours sometimes grind their teeth during discussions with the State about legal corporate tax avoidance.
