US computer giant Dell has taken a dividend of more than €84 million from the Irish unit that manages telephone sales for the home and small business market in Ireland and Britain.
The dividend was paid out from Dell Direct to take advantage of a once-off tax concession introduced last year by President Bush.
The company, which employs more than 1,600 people at Cherrywood, south Dublin, has laid off about 60 staff, 50 from the Dublin operation and 10 from its manufacturing plant in Limerick.
A spokeswoman said this was part of a "minor re-organisation" in its Irish operations. Some of those affected may be redeployed.
Accounts signed off 10 days ago and filed within the last week show that Dell Direct's pretax profit rose to €15.8 million in the year to January from €13.09 million the previous year. In the same period, its turnover rose to €144.69 million from €103.15 million.
The accounts say that the Dell Direct dividend of €84.17 million equated to €38.4 per share in the company. The dividend was declared on January 25th last and paid out three days later.
This payment meant that the company booked a retained loss of €69.85 million for the financial year.
However, a Dell spokeswoman in Dublin said that there was "no impact on the local operation" as a result. "It paid a dividend to its Irish parent company for repatriation to the US in order to take advantage of the US Homelands Investment Act," she said.
This act and associated legislation was part of a package of measures designed to encourage US groups to use the returned money to create domestic jobs. Such funds can also be used for research and development, capital expansion or mergers and acquisitions in the US market.
For a period of one year, these laws allow US groups to repatriate earnings of their foreign subsidiaries at a reduced tax rate of 5.35 per cent, down from the maximum rate of 35 per cent.
Multinationals known to have used the scheme include Kellogg, the cereal maker. Dell Direct, which paid no dividend in 2003, is the second company with Irish operations to acknowledge using the scheme. The first was the drug-maker Forest Laboratories Ireland Ltd, which paid a dividend of $1.26 billion (€1.04 billion) to its parent last year.
Such dividends were paid as foreign groups repatriated a greater proportion of their Irish profits in 2004 than a year earlier. This contributed to a fall in the overall level of retained earnings in US companies, leading to a reduction in the flow of foreign direct investment.
The Dell Direct accounts indicate that its four directors - Alan Cunningham, Nicholas Hartery, Richard Norman and Thomas Welch - received a total of €320,732 in fees for services other than as directors. An unnamed individual or individuals received €93,595 in compensation for loss of office.
The company paid Irish taxes last year of €1.48 million and paid wages and salaries of €66.14 million, up from €55.97 in 2003.
It had a contingent liability for €9.69 million in respect of grants from IDA Ireland "which may be revoked, cancelled or abated in certain circumstances, the most significant of which is the cessation of operations".
