Wednesday 05 October 2022

Big tobacco firms shift €7bn a year through NL to avoid tax: NRC


New research by journalism collective The Investigative Desk and the NRC shows that the world’s four biggest tobacco companies are moving billions of euros through the Netherlands every year to avoid tax.

British American Tobacco, Philip Morris, Japan Tobacco and Imperial Brands use a network of Dutch shell companies to move part of their earnings through the Netherlands. In total, the four firms shift €7bn in royalties, dividends and interest through the Dutch system every year, the NRC said.

‘Six European countries — the UK, Ireland, Belgium, Luxemburg, the Netherlands, and Switzerland – feature prominently in five key tax avoidance methods – shifting dividends; notional (fictitious) interest deduction; profit shifting via intra-firm transactions; royalty payments; and group relief, partly based on internal loans,’ the English summary of the report states.

BAT is already the subject of a court case in the Netherlands for moving €4bn in interest through the Dutch system to avoid tax. The Dutch tax office is demanding BAT pay €1.2bn in taxes dating from the period 2012 to 2016.

The Netherlands is already taking steps to shake off its reputation as a tax haven, and will stop the tax break on royalties next year.

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