Business

Irish-owned companies know how to tap overseas Covid schemes too

Cantillon: US subsidiary of Irish tech business Taoglas has pandemic loan forgiven

Taoglas’s US subsidiary entered into a loan with HSBC as part of a US Covid support scheme, receiving $923,500. Photograph: Alex Wong/Getty Images

Sat Dec 18 2021 - 06:00

Taxpayers in the Republic are not the only ones who have been tapped for financial subsidies by companies here, who then go on to pay significant dividends to their shareholders.

Taoglas is a successful Irish technology business. The US is its largest market and the company reports in dollars in the financial statements lodged with the companies office here.

Its latest accounts detail how on April 7th last year, just weeks after the first wave of the pandemic hit, Taoglas’s US subsidiary entered into a loan with HSBC as part of the Payment Protection Program (PPP), a Covid support scheme operated by the US Small Business Administration. On May 12th, 2020, it received $923,500 at an annual interest rate of 1 per cent.

On June 3rd last year, Taoglas declared a dividend of $2.12 million and on September 30th it declared another $1.16 million payment for shareholders.

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Under the terms of the scheme, the PPP loans would be forgiven if certain conditions were met by the year end. Taoglas met these conditions and on January 26th, 2021, the loan was forgiven with the money recorded as income in its profit and loss account for last year.

Taoglas accounts

The accounts show that its revenue in 2020 declined by 2.5 per cent to $65 million while its pretax profit was 26 per cent lower at $2.8 million. Directors’ remuneration declined to $3.5 million from $4.7 million in 2019.

Taoglas followed the rules of the PPP Covid support scheme and was entitled to a write off of the loan under the terms of the programme.

But taxpayers in America might wonder why a support loan for $923,500 paid last year was written off for an Irish technology company that had the financial means to more than double its dividend payment to shareholders just months after receiving the funds.

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