Friday 18 October 2019

KPMG in Holland again under investigation, this time for tax fraud

Accountancy company KPMG is again under formal investigation by the authorities, this time for suspected tax fraud involving the construction of its new Amstelveen headquarters.

The public prosecution department said in a statement on Thursday the investigation focuses on fake bills supplied by the building firm and inflated costs which were used to depress the company’s tax bill.

The Financieele Dagblad says the allegations are particularly painful because accountants should never be the subject of such claims about its tax returns and points out that KPMG Meijburg is one of the biggest tax advisors in the Netherlands.

Painful

Local chairman Jurgen van Breukelen told a press conference on Thursday the case is ‘extremely painful for KPMG.’ The governance around the company set up to develop the new building was ‘not in order’, he said. KPMG was 70% owner of that vehicle, the FD says.

The FD points out this is the second criminal investigation against KPMG in a short space of time.

The company was also investigated in connection with bribery allegations at building group Ballast Nedam and reached a €7m out of court settlement to head off prosecution. Three members of staff do face charges.

Procedures

Last year, KPMG was fined €900,000 by the Dutch financial sector regulator AFM for failing to have proper internal procedures in place. The company was also involved in the collapse of housing corporation Vestia, the paper points out.

At the press conference, Van Breukelen said the company had failed to move with the times and had an ‘archaic and introverted culture’.

Partners had become over-focused on the ‘bottom line’ and were more interested in their profits. Quality and integrity should take first place, the paper quotes him as saying.

Switch

The revelations come at a time when the big four accountancy groups in the Netherlands are competing for major new corporate contracts.

The Dutch government has introduced new rules forcing large companies to switch auditor every eight years and a number of lucrative contracts are up for grabs.

The new rules will also stop companies using the same accountant to control its books and provide advice. The aim of the change is to make accountants more independent in the wake of the financial crisis.

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