Abellio, a subsidiary of state-owned Dutch railway firm NS which operates services mainly in Germany and Britain, continues to avoid corporation tax through a construction based in Ireland, Trouw revealed on Thursday.
This is despite a government warning to abstain from using this tax avoidance scheme, Trouw said.
Abellio has set up Disa Assets Limited which finances NS trains operating on its concessions in Germany. Profits are taxed in Ireland where corporate tax is 12.5% compared with 25% in the Netherlands and nearly 30% in Germany.
NS began using Ireland in 1998 when it set up NS Financial Services which since then has leased trains to the NS in the Netherlands through Ireland. Caretaker finance minister Jeroen Dijsselbloem earlier said that the Dutch treasury loses €8m on every €100m in NS profit because of the tax dodge.
The Irish unit of NS has built up a profit of €1bn over the years, all of which stays out of the Netherlands. The contruction was discussed in parliament in 2012, prompting Dijsselbloem a year later to say the practice was ‘undesirable’.
In March 2015, NS agreed to terminate the Irish operation pledging that 90% of the trains leased from the Irish unit would be transferred to the Dutch parent company by 2024.
‘In principle, the NS will pay tax in countries where the trains are being used,’ a spokesman told Trouw. This, however, is not the case with the German trains, Trouw points out.
The Irish option is being used because of the limited length period of the train concessions, the spokesman said. ‘At the end of the contract, the trains can easily be leased to the new contract holder.’