Kellogg's pays just €7m corporation tax on €7bn sales directed through Ireland
Cereal giant Kellogg’s has paid corporation tax of just €7m on sales of more than €7bn directed through Dublin-registered Kellogg Europe Trading (KET) over the last five years.
This is due to the fact that KET is often loss-making as it pays large amounts of interest on loans it receives from a Luxembourg-registered cog of the Kellogg’s corporation.
KET's filings for 2013 show that the company has accrued a deferred Irish tax asset of just under €30m due to the firm's losses, according to an analysis of the company's accounts carried out by the Irish Times.
The company will now be able to write off this amount in future corporation tax bills it pays in Ireland.
Kellogg’s recently issued a warning to shareholders in its annual report claiming that an international clampdown on corporate tax avoidance could hit its profit margins.
In a statement yesterday the company said that it was referring to the OECD's proposed Base Erosion and Profit Shifting project which aims to stop corporate tax avoidance on the international front.
The firm said it was a “responsible taxpayer” that worked within the tax laws of the countries where it made and sold food.
It added that the OECD’s reforms were ongoing: “We don’t know what, if any, the potential impact of this will be on our business and so we have to flag it up in our annual report as an uncertainty.”