Honeywell, the US aerospace and engineering multinational, took a €197 million dividend from its Irish subsidiary in 2005, the latest figures show.

Accounts lodged with the Companies' Registration Office show that Honeywell International Technologies in Waterford paid a €197 million dividend to its parent in 2005. Its profit for the financial year was €20.34 million.

Honeywell's Irish operation makes parts for aircraft engines and a number of other precision-engineered products.

Honeywell is a Fortune 500 company which operates in the aerospace, auto and engineering industries.

The company is the latest in a long line of US multinationals to cash in on a tax amnesty designed to encourage businesses to return profits earned overseas and invest them in creating jobs in the US. The amnesty, introduced by the Homeland Investment Act, passed by the US Congress in 2004, allows companies to receive once-off dividend payments from their subsidiaries.

They pay just 5.25 per cent tax on the total amount received, compared to the normal 35 per cent levy on corporate profits.

Under the amnesty's terms, the cash must be invested in the US; 85 per cent of the total dividend payments are then "shielded" from corporation tax, while the remainder is taxed at a reduced rate, which results in an overall rate of 5.25 per cent.

Fears that US corporations were investing too much abroad at the cost of American jobs as well as a need to shore up federal coffers in the wake of George Bush's tax cuts prompted Congress to pass the legislation.

The law sparked the repatriation of huge amounts of cash from the Republic to the US. Last year, a UN report on foreign direct investment showed that a total of €18 billion flowed out of the Irish economy as a result.