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Shell tax dodging in the Netherlands

‘Shell wants to be as transparent as possible, but we can not force ourselves to throw confidential information on the street on the basis of anonymous sources.’

Shell keeps profit tax in the Netherlands secret

Laurens Berentsen

Shell does not answer the question of whether it pays corporation tax in the Netherlands in addition to the income tax on gas extraction by the NAM. The oil company does not want to confirm or deny reporting on this in the newspaper Trouw. However, it can be concluded from the annual reports of Shell companies that the company does not pay tax on its profits in the Netherlands.

‘Shell wants to be as transparent as possible, but we can not force ourselves to throw confidential information on the street on the basis of anonymous sources.’ This is the reaction of CEO Marjan van Loon of Shell Nederland to the message from Trouw that the British-Dutch multinational does not pay any profit tax in the Netherlands. While Shell does make a profit in the Netherlands, even if the NAM remains out of consideration. For example, with its chemical plant in Moerdijk, the refinery in Pernis and petrol stations along the motorways.

Continuously profitable

Trouw bases itself on anonymous sources, but also refers to annual reports of Shell companies. From these annual reports, which the FD itself consulted, it appears that Shell Nederland BV has been continuously profitable since at least 2007. Last year Shell earned € 1.3 billion with its operational activities in the Netherlands. The annual report of the Dutch BV states that € 322 million profit tax was due. But that tax did not end up in the Dutch treasury.

That’s right. Most subsidiaries of Shell Nederland BV form a tax entity for the Tax Authorities with the parent company of the BV, Shell Petroleum NV. This means that the NV settles with the Dutch tax authorities. NAM, a joint venture with ExxonMobil, falls outside this.

Tax claim

Shell Petroleum NV is also profitable. But since 2007 this company has received a very modest tax assessment for corporation tax for only two years. In the other profitable years, a tax claim arose, or a profit at the tax authorities. Last year, the NV made a profit of $ 4.5 billion before tax. The tax receivable amounted to $ 378 million, so the net profit after tax was $ 4.9 billion.

A statement on the website of Shell Nederland states that the oil company earns the majority of its profits abroad. There it also pays the most tax. ‘Profits from abroad are not taxed once again in the Netherlands’, according to the statement.

Fiscus knows about it

It is striking that foreign losses are for the account of the Dutch government. See the difference between the tax payable at Shell Nederland BV and the tax to be received at Shell Petroleum NV.

In the Shell statement, Van Loon states that the oil company follows the tax rules that apply to all companies in the Netherlands. The Tax Authorities also know exactly what Shell is doing, according to the president. There is no reason to doubt this.

Foreign subsidiaries

In the annual reports Shell Petroleum NV declares the tax claims – and by extension the deviation from the nominal Dutch tax rate (in 2017 – 8.36%, against 25%) – from foreign activities. In addition to the Dutch subsidiaries, the NV also includes numerous foreign subsidiaries.

If such a daughter does not drill to gas without success and is subsequently liquidated, Shell may settle the loss incurred in the Netherlands. This can explain why Shell Petroleum NV does not pay any income tax in the Netherlands, while Shell Nederland BV makes a profit here.

Shell is silent.

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