Two Abbott subsidiaries with €1bn plus profits paid no tax

Two Irish subsidiaries of Abbott Laboratories paid no tax in 2011, despite each reporting profits of more than €1 billion.

Abbott Mature Products International Ltd (AMPI) and Abbott Laboratories Vascular Enterprises Ltd (ALVE) made profits of €1.8 billion and €1.1 billion respectively in 2011. The profits of the latter included a €709 million dividend from the former.

Neither company paid any tax as they are both described in their accounts as non-resident Irish entities incorporated in Bermuda. Their accounts also say the companies are non-resident Irish companies “and therefore no taxes are due”. Both have US-resident directors.

The accounts say that AMPI would have been liable for Irish corporation tax of €235 million were the profits not exempt, while the accounts of ALVE say it would have had to pay Irish corporation tax of €139 million were the profits not exempt from Irish taxation.

Direct subsidiary
AMPI has its registered office in Bermuda and is audited by Deloitte & Touche, Dublin. It distributes pharmaceutical products and in 2011 was a direct subsidiary of an Abbott company in Switzerland. Despite having a turnover of €430 million in 2011, it had no staff.

ALVE has its registered office at the law firm Matheson, at 70 Sir John Rogerson’s Quay, Dublin, and is audited by Deloitte & Touche, Dublin.

It distributes medical and nutritional products, holds investments and undertakes research and development. Net R&D expenses in 2011 were €161 million.

The company had a turnover of €271 million in 2011 and received dividends of €716 million from three fellow Abbott companies. It had an average of 228 staff during 2011, according to the accounts. The staff, who were involved in production, research and administrative roles, were paid a total of €17.8 million. The accounts do not say what jurisdiction the staff were employed in.

ALVE has subsidiaries in Holland, Bermuda, Belgium, Costa Rica, Ireland and Gibraltar. ALVE is owned by Irish company Abbott Products, which is unlimited and therefore does not publish accounts.

The latest information about Irish subsidiaries of US multinationals booking huge profits on which they pay little or no tax comes as the Government and the IDA are preparing to counter the negative image created by hearings held into the tax affairs of Apple last week by a US senate committee.

Yesterday the Minister for Jobs, Enterprise and Innovation Richard Bruton repeated the Government's position that no special tax deals were ever done with Apple or other multinational investors.

The Minister acknowledged that companies do exploit differences between different countries’ codes to create opportunities for aggressive tax planning.

“Ireland supports initiatives to deal with such aggressive tax planning but they will be done through international fora like the OECD; they don’t fall to any one country to deal with them,” he said.