James Hardie Industries, the biggest seller of home siding in the US, plans to move its corporate base to Ireland from the Netherlands to benefit from tax arrangements.
The company also proposed transferring its intellectual property, treasury and finance operations from the Netherlands before the 2010 expiry of favourable tax concessions, the Amsterdam-based firm said today in a statement.
The proposed move, which may cost as much as $71 million, will be put to shareholders at a meeting on August 21st, it said. James Hardie recorded a 57 per cent drop in earnings last quarter as a slump in the US housing market slashed profits.
The company, which used Australian-mined asbestos in its building products, pays a maximum 35 per cent of its annual net operating cash flow to a fund set up to compensate victims.
The proposal “will not change the overall commitment of James Hardie”, to the compensation fund, chief executive Louis Gries said.
The costs associated with changing domicile will likely reduce the amount the company may be required to pay to the fund in the 2011 fiscal year, he said.
The company chose not to pursue a move to the US or Australia, partly because of potential tax consequences for shareholders, the statement said.
James Hardie moved its headquarters to the Netherlands in 2001.
James Hardie planned to move to avoid any further disputes with the US Internal Revenue Service under the terms of a tax treaty with the Netherlands, the company said.
The US-Ireland tax treaty didn’t require senior managers to spend a substantial portion of their time in Ireland and provided the company with greater certainty of getting benefits, it said.