EU, EU Commission, EU Parliament, Multi Nationals, NIKE, Paradise Papers, Procter And Gamble, Tax evasion, The Netherlands

Dutch Tax Services

A Dutch tax inspector gave United States multinational Proctor & Gamble permission to move 676 million dollars to the Cayman Islands untaxed, Trouw reported on Tuesday based on its own investigation into the so-called Paradise Papers. As a result, the Dutch treasury missed out on 169 million dollars, or over 145 million euros, in taxes, according to the newspaper.

The Paradise Papers is the collective name for 13.4 million documents and emails about tax havens. The data was leaked to German newspaper Süddeutsche Zeitung, who shared it with global media through international journalist collective ICIJ.

According to Trouw, this decision, or so-called ruling, was made by a local inspector at the Rotterdam office of the Tax Authority in 2008. The inspector seems to have made the decision by himself, without consulting anyone else. According to the Tax Authority's rules, rulings involving such high amounts must first be submitted to a special team of ruling specialists. The Tax Authority acknowledged to Trouw that this ruling did not comply to the Authority's own rules. The spokesperson could not explain why or how this happened, and did not know whether local inspectors violated the rules in other arrangements with multinationals.

Trouw has the document showing the arrangement with Proctor & Gamble (P&G) in its possession. The American multinational is one of the largest suppliers of household and healthcare products in the world. In the Netherlands the company is known for brands like Oral-B, Always, Pampers and Gilette.

Over the past few years, such Tax Authority rulings were frequently subject to criticism, especially after the revelations of the Panama Papers and so-called sweetheart tax deals with multinationals like Starbucks. The Tax Authority doesn't reveal the content of such agreements, which means that the Tweede Kamer - the lower house of Dutch parliament - can't check the agreements. Despite the criticism, several State Secretaries did not scrap the rulings, as they make it more attractive for foreign companies to settle in the Netherlands, according to NU.nl.

These rulings must, however, comply to strict conditions. Former State Secretary Eric Wiebes of Finance sent a standard format of such rulings to the Tweede Kamer earlier this year as an example. It showed that rulings are subject to requirements like a description of the company's global structure, a signature of a second inspector and a list of conditions the company must comply with to keep the agreement from being annulled.

Trouw showed the agreement with P&G to Jan van de Streek, professor of Tax Law at Utrecht University. According to him, it looks nothing like the example ruling Wiebes sent to the Tweede Kamer. This agreement consists only of a two-page letter written on PricewaterhouseCoopers stationary, which refers only to a telephone conversation with the Rotterdam inspector. There is no sign of the other required data, the list of conditions or the signature of a second inspector.

Note EU-Digest: An interesting point is that in last weeks Parliamentary debate, whereby PM Rutte outlined the plans of the new Government the coming years,  he passionately defended to continue the Dutch Government policy of welcoming US multi-Nationals to the Netherlands with open arms - because as he said "it creates jobs". 

The truth of the matter is that even though there are several multi-national companies located in the Netherlands, most of the Multi-Nationals come to the Netherlands, mainly because the Netherlands is known as a Tax Haven for Multi National Companies 

As to the job creation in the Netherlands by US multi-Nationals referred to by PM Rutte, obviously some jobs are created, but in reality most jobs are the result of local small business activities and trade related business developments within the EU.

Read more: Paradise Papers: Dutch tax inspector allows U.S. multinational to evade $169 mil. in taxes | NL Times

TAX EVASION: US backing Apple's TAX Evasion Scheme's

Apple's massive EU tax bill could irk the US http://dw.com/p/1JsBy

EU Taxation Policies: US warns EU over Apple’s tax case

Is Apple cutting corners when paying taxes?

The US government has threatened the European Commission (EC) with retaliation if the body decides to proceed with its plan to demand millions of dollars in unpaid taxes from technology giant Apple.

The US Treasury Department issued a rare warning on Wednesday, August 24, accusing the Brussels-based body of becoming a “supranational tax authority” that poses a threat to international agreements concerning tax reform.

“The US Treasury Department continues to consider potential responses should the Commission continue its present course,” the Treasury said in its strongest language to date.

“A strongly preferred and mutually beneficial outcome would be a return to the system and practice of international tax cooperation that has long fostered cross-border investment between the United States and EU member states,” the warning added.

The European Union (EU) has been investigating a series of tax deals between Apple and Ireland which allow the iPhone maker to pay little or no tax on income earned across Europe.

The EC is expected to rule on the case next month. This is the biggest corporate tax avoidance investigation ever undertaken by the commission.

The EC is the executive body of the EU, responsible for implementing decisions, proposing legislation, upholding the EU treaties and managing the day-to-day business of the bloc.

According to investment bank JP Morgan, if Apple is forced to retroactively pay the Irish corporate tax rate of 12.5 percent on its pre-tax profits, the company might need to cash out as much as $19 billion.

A 2013 report by US Senate confirmed that Apple has paid little to no taxes on at least $74 billion of the profit it earned by exploiting Irish and American tax laws.

Tim Cook, who became Apple’s CEO after the death of its founder Steve Jobs five years ago, has denounced the case as “political crap.”

“There is no truth behind it,” he said. “Apple pays every tax dollar we owe.”

The EU estimates that tax avoidance by multinational corporations costs member states anywhere between $50 million to $78 billion a year in lost taxes.

In addition to Apple, other American companies like Amazon and Starbucks are also suspected of tax evasion.

Note EU-Digest: Hopefully the EU Commission does not cave-in for these US misguided threats and intimidations and tells the US Treasury Department where to shove this warning, which is protective of US corporate tax evaders.   

Read more: PressTV-US warns EU over Apple’s tax case

Offshore Banking Tax Evasion: Tax investigations launched over ′Panama Papers′ revelations

Panama Revelations : Tax Evasion

The 11.5 million documents from the files of Panama law firm Mossack Fonseca, the world's fourth biggest offshore law firm, revealed the details of hundreds of thousands of clients using tax havens.

The records, which were obtained from an anonymous source by German newspaper "Süddeutsche Zeitung," cover a period of almost 40 years, from 1977 until last December. They are alleged to show that some companies domiciled in tax havens were used for suspected money laundering, arms and drug deals, and tax avoidance.

Georg Mascolo led the research for the "Süddeutsche Zeitung" and two German broadcasters on the basis of the data from he law firm's files. They shared the information with the International Consortium of Investigative Journalists (ICIJ), the international arm of the Center for Public Integrity, and a hundred other international news organizations. More than 370 journalists from 76 countries have spent a year going through the material.

ICIJ Director Gerard Ryle said: "I think the leak will prove to be probably the biggest blow the offshore world has ever taken because of the extent of the documents."

Mascolo said Sunday evening on German television that he expected the insight into the business of tax havens to be quite "explosive," adding that more revelations will come out. The news "is very remarkable because we have not had such insight into the business of these tax havens on this scale," Mascolo said.

The UK tax authority, HMRC director-general of enforcement and compliance Jennie Grainger said on Sunday they had approached the ICIJ for access to the material: "We will closely examine this data and will act on it swiftly and appropriately," she said. "Our message is clear: there are no safe havens for tax evaders and no-one should be in any doubt that the days of hiding money offshore are gone."

The Australian Tax Office said on Monday that it would investigate more than 800 Australian clients of Mossack Fonseca for possible tax evasion: "Currently we have identified over 800 individual taxpayers and we have now linked over 120 of them to an associate offshore service provider located in Hong Kong," the Australian tax office said in a statement. It did not name the Hong Kong company.

The law firm Mossack Fonseca has claimed the revelation of the data is a crime: "This is a crime, a felony," Ramon Fonseca, one of the firm's founders said on Sunday. "This is an attack on Panama because certain countries don't like it that we are so competitive in attracting companies," he said.

Juergen Mossack, the other lawyer who co-founded the firm more than three decades ago, was born in Germany in 1948 and moved to Panama with his family, where he obtained his law degree. Mossack's father served in Hitler's Waffen-SS during the Second World War, according to the ICIJ, citing US Army records. It said "old intelligence files" showed the father had offered to spy for the CIA.

The company has denied any wrongdoing, saying it has acted beyond reproach for 40 years and that it has carried out robust due-diligence procedures. The firm also operates in Switzerland, Cyprus and the British Virgin Islands.

The report listed twelve current and former national leaders - from Argentina, Georgia, Iceland, Iraq, Jordan, Qatar, Saudi Arabia, Sudan, United Arab Emirate and Ukraine - among 143 politicians, their families and close associates known to use tax havens. Russian President Vladimir Putin's friend from childhood, the cellist Sergei Roldugin, was named as the linchpin in a scheme to hide money from Russian state banks offshore.

Among national leaders with offshore wealth listed in the papers were Nawaz Sharif, Pakistan's prime minister; Ayad Allawi, ex-interim prime minister and former vice-president of Iraq; Petro Poroshenko, president of Ukraine; Alaa Mubarak, son of Egypt's former president and the prime minister of Iceland, Sigmundur David Gunnlaugsson.

More than 500 banks registered nearly 15,600 shell companies with Mossack Fonseca, according to the ICIJ's analysis.

While the use of offshore companies is not illegal, action to avoid payment of taxes can be. It can also have political consequences. The families of eight current and former members of China's supreme ruling body, the politburo, have been found to have placed wealth offshore.

A member of Fifa's powerful ethics committee acted as a lawyer for individuals and companies recently charged with bribery and corruption, according to the documents. Footballer Lionel Messi is mentioned in the document.

 Read more: Tax investigations launched over ′Panama Papers′ revelations | News | DW.COM | 04.04.2016

Netherlands and Luxembourgih: Starbucks, Fiat Decisions Seen in First Wave of EU Tax Cases - by Stephanie Bodoni Gaspard Sebag

Starbucks Corp. and a Fiat Chrysler Automobiles NV unit are set to be first in the firing line as European Union regulators issue a series of rulings over tax breaks for global companies, including Apple Inc.

The EU may issue decisions against Starbucks and Fiat as soon as next week following a two-year probe into how the companies may have gotten unfair tax treatment from Dutch and Luxembourgih authorities, people familiar with the cases said.

Speculation about the probes intensified.,this week as Margrethe Vestager, the EU’s competition chief, canceled a scheduled visit to China, citing pressing matters relating to her job.

Decisions on whether iPhone maker Apple and Amazon.com Inc. got sweetheart tax deals from Ireland and Luxembourg are expected at a later date, said the people who asked not to be identified because the decision isn’t public.

Read more: Starbucks, Fiat Decisions Seen in First Wave of EU Tax Cases - Bloomberg Business