Belfast Telegraph

Audit for Slack's Irish division ahead of going public

In its listing prospectus, the enterprise software firm said returns for its Irish unit, covering three years to the end of January 2018, will be audited in a move that could result in additional tax charges (stock photo)
In its listing prospectus, the enterprise software firm said returns for its Irish unit, covering three years to the end of January 2018, will be audited in a move that could result in additional tax charges (stock photo)

By John Mulligan

The Irish arm of US tech firm Slack, which plans to go public this month in a move likely to value it at more than $10bn (£7.9bn), is the subject of an audit by the Republic's Revenue Commissioners, the company warned investors.

In its listing prospectus, the enterprise software firm said returns for its Irish unit, covering three years to the end of January 2018, will be audited in a move that could result in additional tax charges

Slack specified that the audit will focus on income tax, payroll taxes and Vat reported on the returns made in the period.

"The audit may result in an additional tax charge with related penalties and interest if the company's position is not upheld during the audit," it said.

Slack added that the New York Department of Taxation and Finance is also auditing sales and "use tax" reported on the company's returns made between March 1, 2016 to the end of May last year.

Slack opened its Dublin office in 2015 and it serves as the group's EMEA headquarters. It now employs about 200 people there.

The latest publicly available set of accounts for Slack's Ireland-based division show that it generated turnover of €25.1m (£19.8m) in the 12 months to the end of January 2018, slightly more than double the figure it reported in the previous financial year.

It made an operating profit of €949,000 (£749,000) in the 2018 financial year. Its 2018 accounts also show that the Irish unit paid almost €478,000 (£377,000) in corporation tax that year, compared to €317,000 (£250,000) the previous year.

On a group basis, Slack posted a net loss of almost $32m (£25m) in the three months of the end of April and a 67% increase in revenue to $135m (£106m) for the period.

Slack, whose chief executive is Flickr co-founder Stewart Butterfield, is due to list on the stock market in New York on June 20.

The company's directors include Dubliner John O'Farrell, a senior venture capitalist in Silicon Valley. He once worked with Eir forerunner Telecom Eireann. Slack has raised $1.4bn (£1.1bn) in funding and its latest fundraising round valued the firm at more than $7bn (£5.5bn).

Its upcoming direct listing won't see Slack offer any shares for sale to investors in order to raise fresh cash.

While not offering to sell shares, the listing will nonetheless again test the waters for flotations following the lacklustre debuts of Uber and Lyft.

Belfast Telegraph

Popular