Morgan Stanley denied allegations by the Dutch Public Prosecution Service that it evaded tax on almost $1 billion worth of dividends more than a decade ago.
According to the Dutch Public Prosecution Service, an Amsterdam-based subsidiary of a foreign bank filed five corporation tax returns between 2009 and 2013. The returns offset €124 million ($140 million) in tax relating to a total of €825 million in dividends paid on listed Dutch shares, the public prosecution service said in a statement Wednesday without identifying the bank. The prosecutor holds the European parent company and an employee involved at the time responsible.
Morgan Stanley confirmed it was the bank in question and rejected the allegations, saying it plans to contest the findings of the investigation by the country’s Fiscal Intelligence and Investigation Service.
“Morgan Stanley rejects the Prosecutor’s allegations about this complex, decade-old matter and intends to contest them vigorously,” a spokesperson for Morgan Stanley said in an email.
“Despite our full cooperation and the lack of clarity in the relevant tax legislation, the Prosecutor is basing this decision on an incomplete investigation and record, in violation of established process.”
On Wednesday, the public prosecutor also imposed a fine of €14 million on ABN AMRO for intentionally filing incorrect tax returns between 2010 and 2013, the Dutch bank said in a statement. ABN AMRO said it will pay the fine to avoid potentially lengthy criminal proceedings, even though it wasn’t involved in the tax returns.
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