DCC has entities in Luxembourg with assets of more than €1bn

DCC plc, the London-listed support services group which has its headquarters in Dublin, has a number of inter-company financing entities in Luxembourg that have total assets of more than €1 billion.

The entities, some of which are Irish companies with Luxembourg branches, appear similar in structure to those that featured in the Luxleaks tax avoidance controversy last year. The use of Luxembourg by multinationals to reduce their taxable profits in other jurisdictions, mostly by generating interest charges outside the duchy, while not generating mirroring taxable profits in Luxembourg, is the subject of ongoing political debate within the European Union.

Structures

The formerly Dublin-listed plc has been using the Luxembourg structures since the middle 2000s. A spokeswoman said that, as a matter of policy, DCC did not comment on company internal financing or tax arrangements.

DCC Finance Sarl, which was incorporated in 2006 and opened a branch in France soon afterwards, had assets of €338 million at the end of March, 2014, according to its latest filed accounts. The accounts list 19 affiliated companies that owed it a total of €109.6 million at year’s end and interest income from such loans of €3.5 million.

The companies that owed money included Flogas Ireland, DCC plc (€22 million), DCC healthcare (€4.5 million) and Robert Roberts (€4.5 million). Creditors were owed €228 million at year’s end and appeared to all be DCC subsidiaries. It had one part-time employee.

Another Luxembourg subsidiary, DCC Funding Sarl, was also incorporated in 2006. It trades in sterling and had total assets of £266.6 million at the end of March 2014, according to its latest accounts. It had one part-time employee.

DCC Treasury Sarl, incorporated in 2008, also trades in sterling. It had total assets of £400 million at the end of March 2014, of which £348 million was amounts owed by linked undertakings, and £366 million was amounts owed to linked undertakings. The company had one part-time employee.

Two Irish subsidiaries have branches in Luxembourg, the company registry filings there show. DCC Financial Services Ireland Ltd is the parent of DCC Funding Sarl and had financial assets at the end of March 2013 of £188.5 million, this being the sum owed to it by its Luxembourg subsidiary. The Irish company had no employees.

Financial assets

DCC Treasury Services Ltd also had a Luxembourg branch. The company had financial assets at the end of March 2014 of €80.7 million and no employees. It is the parent of DCC Finance Sarl, which owed it €80.7 million.

DCC plc reported a profit before tax of £163.3 million in its 2015 financial year, up from £151 million the previous year. It paid tax of £18.8 million, down from the £27 million paid the previous year. Total corporation tax as a percentage of profit before tax fell to 11.6 per cent, from 18 per cent the previous year, according to its 2015 annual report. The group pays corporation tax in the UK, Luxembourg and elsewhere, as well as in Ireland.