IRELAND: PepsiCo, PBG look for Russian tax savings - report
PepsiCo and Pepsi Bottling Group are reportedly looking to make tax savings on their new joint venture in Russia.
The two companies announced earlier this month that they have created PR Beverages, which comprises PepsiCo's concentrate and PBG's bottling businesses, to operate in Russia. Today's (26 March) Irish Times has reported that PR Beverages is a merger of two existing Irish subsidiaries, PBG Ireland and PepsiCo Ireland.
The paper suggested that the move will help the companies save on taxes - the corporate tax in Russia is as high as 24%, the paper noted, almost twice as high as in Ireland. While a reduction to nearer 20% may be on the horizon in Russia, the paper said, PepsiCo and PBG are likely to generate "significant" savings by running their Russian sales through Ireland.
No-one was available for clarification at either PepsiCo or PBG when contacted by just-drinks today.
PBG said earlier this month that it will consolidate the joint venture into its financial results, while PepsiCo will recognise the earnings of the joint venture as equity income. The two companies said that this will have no impact on either of their previously announced earnings per share and cash flow guidance for 2007.
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