Tax authorities: tobacco manufacturer BAT deliberately avoids tax via the Netherlands


NRC and the FD write this, who were present on Thursday at an only partially public hearing of the tax dispute at the court in Haarlem.

The Tax and Customs Administration confirms that the lawsuit has been instituted, but can ‘not comment on the tax position of individual taxpayers’, a spokesperson said.

Interest construction

The British multinational with headquarters in London has, according to the tax authorities, shifted a total of 4 billion euros in profit via the Netherlands between 2003 and 2016. A tax construction would have been set up for this through the Dutch holding of BAT in order to intentionally avoid tax here.

This was done, among other things, by providing loans to subsidiaries at very high interest rates in order to reduce foreign profits. According to the newspapers, interest income in the Netherlands was then shrewdly channeled to the UK, so that there was hardly any profit left here either. And so hardly any tax was paid.

‘Deliberately Deceived’

During the hearing it became clear that the tax authorities believe that BAT and its tax advisers have deliberately misled them during inspections. BAT handed over reports from one of the four major accounting firms required to demonstrate that the cash flows were legal.

But those reports were actually intended to “disguise” the course of action, the tax inspector said at the hearing, according to the two papers.

BAT denies

BAT continues to deny that the company is guilty of tax avoidance and opposes the 1.2 billion euro claim. The tobacco manufacturer says it complies with the tax laws of all countries in which it operates.

“We strongly disagree with the tax authorities’ assessment and therefore oppose the entire claim,” said a spokesman.

The tax authorities say that combating tax avoidance and tax evasion is one of the spearheads of this cabinet.

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