Dutch MP calls for Shell dividend tax probe

A Dutch MP called Saturday for a parliamentary enquiry into how oil giant Royal Dutch Shell has been paying billions in share dividends through the British Channel islands without tax.

GroenLinks MP Jesse Klaver, who leads the environmental party, said on Twitter he had asked the head of the lower house of parliament to look at relations between the Anglo-Dutch company and the government to see if any law had been broken and if politicians had been involved.

“It seems as if the tax authorities have been complicit in tax evasion so as to make the fusion (of the two companies in 2005) possible,” Klaver told the Trouw daily newspaper.

“This is unheard of!”

Up to 2005, Royal Dutch Shell company was composed of a Dutch and British entity working together, but management decided it was best to have a single parent company, with shares listed in both London and Amsterdam.

Trouw said that as a result of an arrangement approved by the Dutch authorities, Shell has since paid share dividends worth some 45 billion euros ($52 billion) through Jersey, one of the British Channel Islands well known for its low tax regime.

This arrangement was necessary, it said, to win over British shareholders to the restructuring of the company but it cost the Netherlands 7.5 billion euros in lost revenue, according to calculations by the Centre for Research on Multinational Corporations (SOMO), a Dutch research group.

“To avoid the British shareholders having to pay tax on their shares and so vote against the restructuring, Shell created two share classes — A shares subject to tax in the Netherlands and B shares paid in Jersey without tax,” it said.

The daily said the Dutch authorities approved the arrangement in 2004.

For its part, Shell told public radio/tv station NOS this was simply “an access mechanism” for the dividend payments and was completely in line with the law.

Prime Minister Mark Rutte has been pressing to end tax on dividends from 2020 as a way of boosting the Netherlands as a foreign investor destination but he has run into fierce criticism from the opposition.

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