C&C subsidiary in Luxembourg has €0.5bn in assets and no staff

Irish drinks company C&C has a Luxembourg subsidiary which has almost half a billion euros in assets but no staff. A spokesman would not comment on whether it had any advanced tax agreements with the Luxembourg tax authorities or whether the company played a role in the Irish group's global tax planning.

C&C Luxembourg Sarl is similar to Luxembourg companies owned by Glanbia and CRH. They also have very significant assets but no employees and are understood to be part of global structures that reduce the groups’ tax bills in Ireland and elsewhere.

C&C Luxembourg shares an address in Luxembourg, 18 Avenue Marie-Thérese, with CRH North America Luxembourg Sarl, which has assets of €2.5 billion and no employees.

Last week a number of reports were published by this newspaper, as part of the Luxleaks projectwhich showed how companies based in Luxembourg could be used by multinationals to reduce their tax bills by creating tax-deductible interest charges outside Luxembourg, which were not mirrored by taxable interest income within Luxembourg.

The accounts of C&C Luxembourg show it had assets of £386 million (€492 million) at the end of February 2013. It recorded a profit of €13 million and paid tax of €60,291.

The company had interest-bearing loans of £346 million out at year’s end to other C&C subsidiaries including C&C Holdings (NI) Ltd, a company with an address in Belfast. It had interest-free loans of more than £200 million from C&C Brands Ltd, Clonmel, Co Tipperary, and a further £134 million, interest-free, from WM Magner (Trading) Ltd, also Clonmel, Co Tipperary.

A subsidiary of C&C Luxembourg Sarl, C&C IP Sarl, had assets of £82 million at the end of February 2013. These included patents, licences and concessions. The company had no staff costs.

The intangible fixed assets acquired by the company, according to the accounts, include Tennents Brands (£66.5 million), Gaymers Brands (£10.8 million) and Hornsby’s cider brand (£4.8 million). Net turnover, at £8.2 million, arose from royalty income from affiliated undertakings and earned from owned brands. Tax paid was £20,000.

Another Luxembourg company, C&C IP (No 2) Sarl, owns the Woodchuck and Wyder’s cider brands, which were acquired for $41 million, according to the company’s accounts.

A spokesman for C&C said the group did not want to comment and referred to its most recent annual report, where it said C&C did not like to pay tax unnecessarily but equally was respectful of the markets in which it operated and the communities that relied on its tax contribution.

Most of its profits were earned in the Republic and Britain, which have competitive corporation tax rates compared with the European average, C&C said in its return. The group paid an effective tax rate of 14.3 per cent in the first half of the current financial year.