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BAT appeals 1.2 bn Dutch tax claim

British American Tobacco (BAT) is fighting  a record  1.2 billion euro claim for tax avoidance. Thursday 30 October a court in the city of Haarlem will consider a long-term dispute between the tobacco manufacturer and the Dutch tax authorities.

The Investigative Desk

British American Tobacco (BAT) is fighting  a record  1.2 billion euro claim for tax avoidance. Thursday 30 October a court in the city of Haarlem will consider a long-term dispute between the tobacco manufacturer and the Dutch tax authorities. 

In 2015, the Dutch tax authorities imposed an additional tax of 31 million euros. BAT appealed this decision. Last year, research by The Investigative Desk showed that the claim had risen to 1 billion euros. In its most recent semi-annual report BAT reported that the Dutch tax authorities increased the claim again. As a result, it totals now more than 1.2 billion euros, consisting of additional tax assessments, fines and interest.

The case concerns internal payments within the BAT group in the period from 2003 to 2016. According to the tax authorities, the tobacco company used various financial constructions that were intended to avoid taxes. For example, a BAT holding company established in the Netherlands lent large amounts to subsidiaries abroad  at high interest rates. This lowered BAT’s foreign profits.

The Dutch holding company immediately forwarded the income to a parent company in the United Kingdom. Consequently, BAT paid hardly any profit tax in the Netherlands. This disadvantaged the Dutch treasury, according to the tax authorities. 

By Stefan Vermeulen and Sergio Nieto Solis

Read the full article (in Dutch) here.

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