Glanbia’s managing director has defended the company’s tax arrangements, insisting it pays an effective rate of 17 per cent.
Siobhán Talbot was responding to reports that three of its Luxembourg subsidiaries, which have no employees, paid just €200,000 on reported profits of €40 million last year, equating to a rate of 0.5 per cent.
"We only use legitimate structures to support our international expansion," Ms Talbot told The Irish Times.
"The other important thing to note is that our effective tax rate is 17 per cent and we are a very significant economic contributor in the jurisdictions [in which] we operate, including Ireland. "
The group's effective rate of tax differs from the 12.5 per cent corporate rate applying to firms here because Glanbia operates across several different tax jurisdictions.
Contribution
“I think the context is important in terms of the [company’s] overarching contribution,” she said, noting that Glanbia employs some 2,000 people in Ireland and is investing heavily in its Irish operations.
“The Luxembourg arrangements are part of the totality of many financing arrangements that the group would have,” she said.
Glanbia was one of several Irish companies to feature in the so-called LuxLeaks revelations, which shed light on Luxembourg’s tax arrangements with scores of global companies.
The documents leaked by a consortium of investigative journalists showed some firms effectively lowered their tax burden to less than 1 per cent of profit by making deals with authorities in the tiny EU nation.
Subsidiary
Glanbia’s largest Luxembourg subsidiary, Glanbia Luxembourg SA, had assets of $1.04 billion at the end of November 2014, recorded a profit of $26.1 million and paid just $171,121 in tax.
Notes to the accounts, which are audited by PwC, show the company was owed $890 million at year’s end by affiliated undertakings, with the debts carrying varying interest rates of Libor plus 1.9 per cent or 3.85 per cent.
The affiliated undertakings included Glanbia Foods Inc, in the US, and Irish company Glanbia Nutritionals (Ireland) Ltd.
