Saturday 25 November 2017

Russian oligarch's company has paid only €1,952 tax over five years

Deripaska worth $8.8bn, owns Limerick plant

BILLIONAIRE: Oleg Deripaska
BILLIONAIRE: Oleg Deripaska
Nick Webb

Nick Webb

BILLIONAIRE Russian oligarch Oleg Deripaska's highly profitable Aughinish Alumina firm paid just €1,952 in corporation tax over the last five years, despite generating sales of over €191m.

Deripaska, who is worth $8.8bn according to Forbes magazine, owns the $1.2bn-valued Aughinish Alumina plant in Limerick via his vast Rusal empire – the world's largest aluminium producer. The 45-year-old former metals trader was Russia's richest man before resources prices dipped and the financial crisis hit valuations.

Between 2007 and the end of 2011, Deripaska's Irish company made pre-tax profits of €20.25m, from revenues of €191m. Filings show that Auginish Alumina Ltd paid no Irish corporation tax in 2007, 2008, 2009 or 2011. In 2010 it paid €1,952 in corporation tax. Over this period, Auginish Alumina paid an effective tax rate of just 0.0096 per cent on its sales.

Rusal did not respond to questions submitted by the Sunday Independent last week.

Limerick Alumina Refining, a parent company, paid less than €350,000 in corporation tax since 2008. The company has generated revenues of over €1.52bn in that period. While it made profits of over €22m since 2010, it lost over €49m in the previous two years. Both Aughinish and Limerick Alumina Refining are audited by KPMG.

In 2010, the plant received a capital grant of €4.4m from the IDA.

The companies have large actuarial losses on its pension scheme. Accounts note that tax exposure was reduced through timing differences and losses claimed as group relief.

Aughinish Alumina is Europe's largest alumina refinery, producing more than 1.6m tonnes of alumina every year.

Ireland's tax regime has come under increased scrutiny in recent weeks, after a US Senate Committee claimed that Ireland had given Apple a special tax deal, which enabled it to save billions of dollars. The Government and IDA have strongly denied that any companies have received special deals and have maintained that the Irish tax system is transparent.

Last week Google was pulverised by the British parliamentary committee, investigating its tax practices. The internet giant's claims that its Irish operation is responsible for hundreds of millions of pounds in advertising sales in Britain are "deeply unconvincing", according to the parliamentary committee.

While Ireland's 12.5 per cent corporate tax rate is not directly under fire, the structure of tax treaties and tax arrangements between Ireland and other countries is increasingly contentious. Tax legislation allows multinationals to shift money from one jurisdiction to another, legally reducing their tax bills. Infamous tax manouevres nicknamed the the 'Double Irish' or the 'Dutch Sandwich' have seen corporate tax payments reduced by the likes of Google and Boston Scientific.

Moves to make corporations pay a 'fairer' level of tax have shot to the top of the political agenda at this week's G8 summit in Fermanagh.

Last Friday, OECD Director for Tax Policy & Administration Pascal Saint-Amans told RTE that Ireland can't offer a competitive system "plus participate in all the tricks or facilitate the use of all the tricks by companies, making sure that they pay no tax instead of 12.5 per cent". He warned that other countries will take unilateral protectionist measures against Ireland unless action is taken.

Irish Independent

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