Pepsi firm with $1bn assets pays taxes in Curaco
Irish arm of drinks giant paid just $215 in 2011
An Irish division of sugary drinks giant Pepsi has financial assets of close to $1bn here – but pays all its taxes in Curaco, an ultra low-tax island off the coast of Venezuela.
PepsiCo Global Investment Holdings (PGIH), a company based in Dublin, had accumulated profits of $400m in 2011 in recently filed accounts here.
In Curaco, an island which is part of the Dutch Antilles, it paid taxes of just $215 in 2011 and $17,109 in 2010 according to the accounts of Pepsi's Irish subsidiary.
PGIH states it has financial fixed assets of $923m and the company is used to provide finance to other group companies. Pepsi is the latest company – following Apple, Google, Microsoft, Symantec, Abbott Laboratories and US medical giant Boston Scientific – to have emerged as having Irish subsidiaries that are used as part of an international network of companies designed to reduce how much tax mega companies pay.
The New York Times last Sunday ran a major article on how Pepsi and Coca Cola both had located major manufacturing facilities for the concentrate used in soda in Ireland as well as Singapore.
The newspaper said that the use of subsidiaries in low-tax jurisdictions like Ireland had – according to research carried out for it by S&P Capital IQ – reduced the average corporate income tax paid by the soft drinks industry to 19.2 per cent, versus the 29.1 per cent paid by the average company in the Standard & Poor's 500.
Tax techniques used by Pepsi and other multinationals based here are legal but they have been criticised by American politicians desperate to raise more revenue.
The IDA and the State have been on a publicity counter-offensive to protect Ireland's low-tax regime. Last Friday, Minister for State Lucinda Creighton was the latest senior politician to deny Ireland was a tax haven for US multinationals. She said Ireland's tax authorities "don't cut special deals for any company". Apple has said it paid a rate of only 2 per cent tax on tens of billions of dollars of global income. However, Ireland has denied this constitutes a "special deal".