JBS’s global tax avoidance hub: Luxembourg
Multinational JBS avoided an estimated USD 221 to 442 million in taxes in 2019-2022
SOMO looked into a web of Luxembourg-based mailbox companies that JBS uses to avoid taxes. The company’s tax avoidance most likely affects JBS’s main markets, such as the USA, Canada and Mexico. The company has not disclosed these practices, which could pose a financial risk for investors. This is of particular concern now that the company is seeking shareholder approval for a listing on the New York Stock Exchange (NYSE).
Secret structures
Our research builds on previous research on JBS’s tax avoidance in Australia(opens in new window) and the UK(opens in new window) and digs further into the multinational’s use of intercompany loans. For the 2019–2022 period, the researchers estimate that by using this structure, JBS avoided approximately USD 293 million in corporate income taxes.
JBS also uses strategies to avoid withholding tax by restructuring dividend payment flows. Regarding withholding taxes on intercompany dividend payments, our estimate suggests that the company avoided at least USD 148 million from 2019 to 2022.
Record revenues
The Brazilian multinational JBS is the biggest meat company in the world, with record revenues of USD 73 billion in 2023. The company is controversial for its reported links to illegal deforestation, land grabs from Indigenous Peoples, massive greenhouse gas emissions, modern slavery, and, more directly, for its involvement in child labour, unhealthy and unsafe meatpacking operations, animal cruelty, and corruption.
In this context, we looked at the network of mailbox companies JBS uses in Luxembourg. Our calculations estimate that JBS avoided at least USD 221 to 442 million in taxes in the period 2019 – 2022. This practice appears to erode the tax base in JBS’s main markets of operation, especially the USA.
This week, the company received approval from the Securities and Exchange Commission (SEC) to be listed on the New York Stock Exchange. Concerned groups of investors, US Senators and Members of the European Parliament have called upon the SEC to scrutinise and dismiss the company’s application, but their concerns have been overlooked. Now, JBS will need approval from its shareholders to restructure.
“It is bizarre that the SEC simply approved JBS’s New York Stock Exchange listing considering all the concerns raised about its environmental and human rights violations. On top of this, this research shows how JBS also fails to adequately inform investors of material risks in relation to its tax avoidance practices.
Ultimate holding in the Netherlands?
Now that the SEC has given the green light, JBS will need approval from its shareholders for its restructuring. This includes a proposed conversion of outstanding shares for new shares in a new Dutch ultimate holding. In September 2024, 20 NGOs, including SOMO(opens in new window) , called on shareholders to vote against this proposal, for the significant risk to the climate, people, and investors that JBS is associated with. JBS’s shareholders are scheduled to vote(opens in new window) on its US listing on 23 May 2025.
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JBS’s global tax avoidance hub: Luxembourg (pdf, 645.41 KB)
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Vincent Kiezebrink
Researcher
