Tax authorities investigate tax construction Flemish entrepreneur Fernand Huts
The Belgian tax authorities are investigating a scheme whereby entrepreneur Fernand Huts allegedly sent hundreds of millions of euros in dividends to the tax haven of Jersey, according to De Tijd. The Antwerp-based entrepreneur responded to the newspaper article with an angry open letter accusing the tax authorities of leaking sensitive information to the press.
According to De Tijd's investigation, the Special Tax Inspectorate ((STI) is targeting a scheme whereby Huts allegedly transferred hundreds of millions of euros in dividends from Belgium – untaxed – to his trust (a combination of different companies, ed.) in the tax haven of Jersey. “For the Antwerp-based NV Katoen Natie alone, the tax claim in the case amounts to more than 66 million euros,” the newspaper wrote.
Huts responded fiercely to the newspaper article in an open letter addressed to Belgian finance minister Jan Jambon. “Such practices (leaking a confidential tax file, ed.) create an atmosphere of intimidation rather than consultation, and put pressure on legal proceedings through the media,” he wrote. Huts speaks of a “serious precedent that destroys legal certainty.” According to Huts, other entrepreneurs also have problems with “the intimidating approach” of the tax authorities.
“Such practices create an atmosphere of intimidation rather than consultation"
The Jambon cabinet refused to comment on individual cases. The STI itself also does not wish to comment on the matter. It is not clear whether the leak actually originated with the tax authorities and Huts does not provide any evidence to support this.
The tax construction
According to De Tijd, the Belgian Katoen Natie companies paid out their profits as millions in untaxed dividends to the parent company in the Grand Duchy of Luxembourg. From Luxembourg, the money was then sent to the trust in Jersey, where companies pay zero per cent tax on dividends.
If the dividends had been paid out directly from Belgium, they would have been subject to 30 per cent tax. According to the tax authorities, this constitutes an abuse of the European “parent-subsidiary directive”, which prevents parent and subsidiary companies within the EU from being double taxed.
Katoen Natie disputes the tax authorities' interpretation and says that there is no artificial construction. The company will also submit this argument to the competent court, it says.
#FlandersNewsService | Flemish entrepreneur Fernand Huts © BELGA PHOTO ERIC LALMAND
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