Corrib Gas Project: Vermilion’s shameful tax avoidance deal

In order to facilitate intra-group financing, Vermilion was setting up a Hungarian company that would have a branch in Luxembourg, with an office, a desk, a telephone, fax number and one employee on its payroll.

News Release – Issued by Shell to Sea

November 7th , 2014 – For immediate release

— Corporation tax is only means of extracting revenue from Irish resources —

Shell to Sea has called on Minister for Energy and Natural Resources Alex White to clarify what impact Corrib Gas partner Vermilion’s Luxembourg tax avoidance deal – revealed in today’s Irish Times – will have on the revenue the exchequer thinks it will earn from the Corrib gas field. [1]

Spokesperson Maura Harrington said: “Under Ireland’s dysfunctional licensing terms, corporation tax is the only means the State uses to extract revenue from gas or oil found under Irish territory. Today’s revelation that Vermilion is using a Luxembourg tax avoidance deal to reduce its tax bill in Ireland raises serious questions for Minister Alex White and the Government.”

“The ‘Luxleaks’ disclosure confirms what campaigners and others have warned about for many years – that creative accounting means the revenue earned from a gas field such as Corrib will be only a tiny fraction of the revenue these multinationals generate for their private and out-of-state shareholders. [2]

Ms Harrington continued “Shell, Statoil and Vermilion plan to sell the gas from this Irish gas field to Irish consumers at the international market rate, and will then use complex tax structures such as those involving Luxembourg to move their profits around the world and ensure the Irish people see little or none of the revenue.”

Former Managing Director of the Corrib Gas project, Brian O’Cathain previously stated in 2010 “That Corrib will never pay tax”.[3]

ENDS

For more information contact:

Maura Harrington: 087 9591474
Terence Conway: 086 0866264
http://www.shelltosea.com

RELATED

Corrib gas firm slashed Irish tax liability via Luxembourg: Independent.ie 7 November 2014

Extract

A company behind the controversial Corrib gas project – Canadian firm Vermilion Energy – used complicated corporate structures in Luxembourg to cut its tax liability as it spent tens of millions of euro to help bankroll development of the gas field, leaked documents show.

Corrib gas partner using Luxembourg deal to reduce tax bill: Irish Times 7 November 2014

In order to facilitate intra-group financing, Vermilion was setting up a Hungarian company that would have a branch in Luxembourg, with an office, a desk, a telephone, fax number and one employee on its payroll. 

Corrib gas spending on projects to top €3.6bn by end of 2015: Independent.ie 6 November 2014

Extract

Emoluments for the firm’s three directors, including managing director Michael Crothers, rose from €1.4m to €2.17m.

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