Tax Watch: Methodology
This survey draws on data collated by The Irish Times business team as part of its Top 1000 Companies project (www.top1000.ie) and is extracted from company filings to the Companies Registration Office and annual reports. The data is based on latest accounts filed as of Friday, September 13th 2013.
Only companies which are deemed to have “substance”, ie employees on the ground in Ireland, are deemed to be eligible for inclusion in the Top 1000 – hence companies which may opt to operate in Ireland solely for tax reasons are outside the scope of this survey.
The survey is based on companies which file publicly disclosed accounts - unlimited companies, for whom turnover is estimated, or companies who file on a global consolidated basis, are excluded.
In this respect, it should be noted that tables are based on information that is publicly available, and there may be omissions given that it is impossible to determine the tax charge made by some companies.
The tax figure is based on the “tax on profit on ordinary activities” given in the profit and loss account, and is used to illustrate current tax practices. It is this figure which is used to indicate a company’s effective tax rate (ie tax paid divided by pre-tax profit). Note that in some cases the figures shown may have been distorted by the inclusion of non-trading items. In addition, given the vagaries of a company’s performance from year to year, and therefore its resulting tax liabilities, the survey is meant to give a snapshot of tax payments and should not be seen as a comprehensive review of a company’s practices – for example, a company may pay a particularly high effective rate one year, but may not do so in subsequent years. Likewise, a company may book low tax in one year but might pay more in previous or subsequent years.
Employee figures are typically based on figures relating to Irish operations and Irish accounts, but in the case of Irish multinationals – eg CRH – the global figure is used.
When it comes to calculating the average effective tax rate of the Top 1000 companies, the following
exclusions have been made: companies registered in Northern Ireland; charities; companies which have posted a loss; financial services companies;
companies which have earned a tax credit; and some outliers - such as companies paying tax at 0 per cent or 300 per cent.