Tech giant Genzyme pays only €75k in tax

The Irish arm of global technology giant Genzyme paid only €75,000 in corporation tax here last year in spite of its revenues jumping by 20% to €1.533bn.

Accounts filed by Genzyme Ireland Ltd show the firm recorded a 47% increase in pre-tax profits, from €32.3m to €47.97m, last year.

The French-owned company saw revenues at the Waterford firm jump by 20%, from €1.28bn to €1.53bn, in the 12 months to the end of last year.

The accounts confirm that arising from Ireland’s corporation tax rate of 12.5%, the firm’s tax liability would have been €5.99m. However, they show that a combination of “timing differences” totalling €6.13m and overpaid tax of €825,000 in 2012 helped reduce the tax bill to €75,000.

The €75,000 tax paid represents less than 1% on the pre-tax profit of €47.973m; its post-tax profit was €47.898m. In 2012, Genzyme paid €7.76m in corporation tax.

Gross profits at Genzyme were hit last year by the company’s royalty charge increasing from €553.5m to €671.6m.

Established in Waterford in 2001, Genzyme Ireland is the primary distribution centre for many of Genzyme’s major treatments. Its products and services are focused on rare inherited disorders, kidney disease, orthopaedics, cancer, transplant and immune disease, and diagnostic testing.

Genzyme Ireland increased its employee numbers from 477 to 487 last year, with staff costs totalling over €38m.

The plant at Waterford has shown rapid growth in recent years, with turnover increasing more than sevenfold since 2007 when revenues of €219.3m were generated.

The increase in profits last year is attributable to the increase in business and a €21.99m impairment charge in 2012 that did not recur last year. Its R&D spend last year more than halved, going from €11.7m to €5.2m.

Emoluments to five directors that served during the year totalled €1.55m; €2.4m was paid to four directors in 2012.

Cost of sales increased from €1.16bn to €1.42bn last year, while gross profit fell from €112.3m to €105.8m. The profits take account of the non-cash depreciation costs of €21.22m.

The profits secured last year resulted in the company having €208m in accumulated profits to the end of December last. It had total shareholder funds of €332.1m.

A breakdown of the company’s turnover showed 67% or €1.023bn of sales, occurred in the EU, 24% or €367m in the US, and the remaining 9% in ‘other’.