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Morgan Stanley will pay €101 million ($117.4 million) in fines to resolve allegations that it intentionally filed false tax returns and evaded paying taxes on dividend withholdings in the Netherlands, the country’s public prosecutor’s office said Thursday in a statement.
Between 2007 and 2012, an Amsterdam-based subsidiary of the bank acquired Dutch-listed shares and held them for short periods around dividend dates – or lent them to others – yielding dividend payouts of €830 million, the prosecutor said.
The subsidiary then offset the dividend tax withheld on these shares – a total of €124 million – across five corporate income tax returns between 2009 and 2013, the prosecutor said.
The bank established the Amsterdam-based subsidiary in 2006 specifically to “[enable] parties, who were not entitled to credit or to reclaim dividend tax, to nonetheless be able to wrongfully obtain the benefit of a portion of the set-off dividend tax,” the prosecutor said.
Morgan Stanley said it is “pleased to have resolved this historical matter, which related to corporate tax returns filed in the Netherlands over 12 years ago,” a spokesperson for the bank said.
The prosecutor had said earlier this year that it would subpoena Morgan Stanley. But the bank agreed to accept the fines just ahead of criminal proceedings, according to the prosecutor.
The fines come in addition to tax that the bank paid, plus interest, at the end of 2024.
The Dutch Tax Administration discovered the transactions in late 2010 and began audits and tax litigation that lasted years, the prosecutor said.
Source: finance.yahoo.com
