Dutch to investigate 4,000 corporate tax deals after P&G error

Thursday, 9 November 2017 00:00 - - {{hitsCtrl.values.hits}}

Amsterdam (Reuters): The Netherlands will review 4,000 corporate tax deals agreed between the government and companies between 2012 and 2016 to determine if they were properly issued, the Finance Ministry said on Wednesday.

Dutch tax breaks to large international companies came under renewed fire on Tuesday after newly leaked documents revealed what the finance ministry acknowledges were errors in the drafting of a tax ruling for US consumer goods giant Procter & Gamble (PG.N).

The ministry “would investigate whether more than 4,000 international tax rulings were issued according to the intended procedure,” the deputy finance minister said in a letter to parliament.

Documents leaked in the so-called “Paradise Papers” trove of offshore records shed light on a previously undisclosed deal made in 2008, which gave P&G an estimated tax break of $ 169 million.

The set-up of that deal did not meet requirements, as it was signed off only by one inspector of the tax authority. P&G, the maker of Papers diapers, Gillette razors and Tide laundry detergent, issued a statement on Tuesday denying involvement in any form of tax avoidance.

The Netherlands has come under increasing pressure in recent years to clamp down on tax avoidance by multinational companies, which funnel trillions of dollars through the country every year to tax havens.

The new Dutch Government said last month it would try to make the country less attractive to shell companies that act as a conduit for money destined for tax havens. It also promised to lower the corporate tax rate to encourage foreign companies to move their activities to the Netherlands.

The Paradise Papers are leaked documents from prominent offshore law firm Appleby that relate to the investments of wealthy individuals and institutions ranging from US Commerce Secretary Wilbur Ross to Britain’s Queen Elizabeth.