Larry Goodman’s beef empire has used “tax adjustments” in a little-known Dutch company to reduce its overall tax bill by passing loans for hundreds of millions of euro between different arms of his business in Ireland and the Netherlands, The Irish Times has learned.
The tax strategy, described as “aggressive tax avoidance”, is revealed in filings for an obscure Rotterdam entity which is part of the web of European companies linked to Mr Goodman’s ABP Food Group in Co Louth.
The affairs of Trojaan Investering BV were uncovered in a joint investigation by The Irish Times and Lighthouse Reports, a European non-profit investigative news group.
This company borrowed interest-free and issued interest-bearing loans within ABP in a mechanism that appears to have enabled the group to shift profit from certain Irish and UK operations to the Netherlands.
Trojaan then made use of Dutch “tax adjustments”, as company accounts described them, to pay tax at much lower rates than would have applied elsewhere. Trojaan paid dividends totalling €113.68 million between 2013 and 2017 to a Luxembourg company, Kilbroney Investments, part of the Goodman group with a €792 million balance sheet in 2020.
Official filings show Trojaan borrowed some €493 million interest-free in 2012 from an Irish ABP company called Warrenpoint Investments, of which Mr Goodman was a director and which had Kilbroney Investments as a shareholder. Trojaan borrowed another €105 million interest-free elsewhere in ABP that year.
In separate 2012 transactions, Trojaan lent €566 million to other ABP companies, €400 million interest-bearing and the rest interest-free. Borrowers included the Irish entity ABP Foods, which received €134 million at the Euribor benchmark interest rate plus 4 percentage points.
Such loans are profitable for Trojaan because it can borrow for free from other ABP companies. But it paid little tax on such profit thanks to Dutch laws that allowed companies to deduct from tax the “imputed interest” costs they would have faced if they borrowed on the open market instead of borrowing interest-free from sister companies.
Trojaan’s 2013 profit was €22.4 million but had a tax liability that year of only €460,811 after a €5.14 million deduction for “imputed interest”, an effective tax rate of 2.06 per cent instead of the usual 24.95 Dutch rate and lower than the 12.5 per cent Irish rate. The effect of such a transaction is to reduce the overall taxes within the ABP group.
One Dutch expert — Jan Vleggeert, a tax law professor at Leiden University in the Netherlands — said such practices could be cast as “aggressive” tax avoidance. “I would describe it as such, but other tax practitioners might disagree.”
Asked about such claims and other detailed questions about Trojaan, ABP replied: “We have been and remain tax compliant in all jurisdictions in which we operate. We have no further comment to make.”