Monday 23 September 2019

Slack being audited by Revenue as $10bn listing looms

Tech giant: Stewart Butterfield, CEO of Slack Technologies. PHOTO: Bloomberg
Tech giant: Stewart Butterfield, CEO of Slack Technologies. PHOTO: Bloomberg
John Mulligan

John Mulligan

THE Irish arm of US tech firm Slack has warned investors it is the subject of an audit by the Revenue Commissioners that could result in additional tax charges.

The company plans to go public this month in a move likely to value it at more than $10bn (€8.9bn),

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In its listing prospectus, the enterprise software firm said returns for its Irish unit covering three years to the end of January 2018 will be audited.

Slack specified that the audit will focus on income tax, payroll taxes and Vat reported on the returns made in the period. "The audit may result in an additional tax charge with related penalties and interest if the company's position is not upheld during the audit," it said.

Slack added that the New York Department of Taxation and Finance is also auditing sales and "use tax" reported on the company's returns made between March 1, 2016, to the end of May last year.

Slack opened its Dublin office in 2015 and it serves as the group's EMEA headquarters. It now employs about 200 people here.

The latest publicly available set of accounts for Slack's Ireland-based division show that it generated turnover of €25.1m in the 12 months to the end of January 2018, slightly more than double the figure it reported in the previous financial year.

It made an operating profit of €949,000 in the 2018 financial year, compared to €741,000 the year before. Its 2018 accounts also show that the Irish unit paid almost €478,000 in corporation tax that year, compared to €317,000 the previous year.

On a group basis, Slack posted a net loss of almost $32m in the three months to the end of April, and a 67pc increase in revenue to $135m for the period.

Of its $400.5m revenue in its most recent full financial year, $145.4m was generated from its business outside the United States.

Slack, whose CEO is Flickr co-founder Stewart Butterfield, is due to list on the stock market in New York on June 20. The company's directors include Dubliner John O'Farrell, a senior venture capitalist in Silicon Valley. He once worked with Eir forerunner Telecom Éireann.

Slack has raised $1.4bn in funding, and its latest fundraising round valued the firm at more than $7bn.

Its upcoming direct listing won't see Slack offer any shares for sale to investors in order to raise fresh cash. While not offering to sell shares, the listing will nonetheless again test the waters for flotations following the lacklustre debuts of Uber and Lyft.

Irish Independent

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