In the wake of the Luxleaks controversy last year, then chair of the Revenue Commissioners Josephine Feehily said that a company's tax policies contained the potential for reputational risk if the strategies they were implementing, while wholly legal, were perceived to be overly aggressive.
Companies that had the misfortune to be dragged into the Luxleaks controversy and see documents outlining tax deals done with the Luxembourg authorities (by way of the local office of PWC) come into the public domain, might have had particular reason to ponder Feehily's view.
Of course, countering that is the huge amounts of money saved by major multinationals when they are able to reduce their effective tax rates by even small parts of a percentage point. This cheers up shareholders and can leave the business with more cash to grow its turnover and/or invest in holding off its competitors.
The tension between these two issues, if there is one, is part of the reason that so many actors on the multinational stage express the view that they apply the laws that govern international tax matters, paying the tax they should, and no more. If governments want them to pay more, then they should change the rules. Which, of course, is precisely what the Organisation for Economic Co-operation and Development, at the request of the G20, is trying to do through its Beps project.
Meanwhile, Glanbia, one of the Irish firms featured in the Luxleaks coverage, has set up a new Irish company. Glanbia Cheesip Ltd will, as its name indicates, acquire and hold intellectual property associated with Glanbia's dairy cheese operations, as well as carry out associated financial transactions.
The companies registry in Luxembourg shows that at the end of last year Glanbia Cheesip had registered a Luxembourg branch.
The Irish coverage of the leaked Luxleaks documents included details of tax agreements Glanbia negotiated with Luxembourg on behalf of subsidiaries in the duchy, through which €1 billion had passed. On the face of it, it would appear it is awaiting the outcome of Beps, before it changes tack.
