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Unions accuse Chevron of "massive" tax avoidance via the Netherlands

Tue, 09th Oct 2018 12:42

AMSTERDAM, Oct 9 (Reuters) - International and Dutch unionsfiled a complaint with a global trade body on Tuesday accusingChevron Corp. of funnelling billions of euros throughletter box companies in the Netherlands to avoid taxation.

In a rare step, the federation of Dutch trade unions, theInternational Transport Workers' Federation and Public ServicesInternational lodged the complaint with the Organisation forEconomic Co-operation and Development (OECD) in The Hague.

Chevron did not respond to repeated requests for comment byemail and phone.

Reuters was unable to determine why the U.S. oil major hadbeen singled out in the complaint, but the trade unions said taxavoidance deprived workers they represented of basic governmentservices and pressured their wages.

"The workers and communities we represent suffer whengovernment-provided services such as health care, education,infrastructure, water, energy, and public safety decline." thecomplaint said. "Unfortunately, multinationals’ practice ofavoiding paying taxes in the countries in which their wealth isearned deepens global wealth inequality and empowersmultinationals against workers and governments."

Scores of multinationals use the Netherlands, which has anetwork of tax treaties with roughly 100 countries, to shiftdividends, interest and royalties untaxed through Dutch shellcompanies to tax havens overseas.

In their 35-page complaint the unions alleged Chevron hadused its Dutch subsidiaries to breach OECD disclosure guidelinesin respect of their operations with Chevron’s Nigerian,Argentinian, and Venezuelan businesses. In those examples, thecomplaint states that Chevron specifically failed to meetrequirements to pay tax in the country of extraction and toadhere to Dutch financial disclosure requirements.

The unions' statement said Chevron’s Dutch subsidiaries,through frequent intra-group operations whose main purpose wasthe avoidance of taxes in multiple jurisdictions, breached thespirit of Dutch corporation tax law.

"The American company is carrying out tax avoidance on amassive scale," the groups said in a statement to the media,detailing the complaint.

"The Netherlands is already a tax haven which encouragescompanies to pay less."

The Dutch government, which says it wants to help stop taxavoidance, has come under pressure from the OECD and theEuropean Commission to take measures to halt tax avoidance.

A spokeswoman at the Dutch Finance Ministry said thegovernment does not generally comment on cases involvingindividual companies and had no immediate reaction.

A major complaint expressed by the OECD and the EuropeanCommission, is the Dutch finance ministry's practice of granting"advance rulings", or agreeing in advance with largecorporations on how a given structure will be taxed.

In 2015 the European Commission ordered the Dutch to reclaimup to 30 million euros ($34.7 million) in back taxes fromStarbucks after ruling that the tax arrangement withthe U.S. coffee company amounted to illegal state aid. Starbucksdenied wrongdoing and has appealed.(Reporting by Anthony Deutsch; Editing by Jon Boyle)

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