Dutch authorities are issuing a financial penalty against Morgan Stanley after concluding a long-running investigation into the bank’s handling of dividend withholding taxes.
According to the Netherlands Public Prosecution Service, two Morgan Stanley entities in London and Amsterdam face penalty orders connected to a dividend tax structure operated between 2007 and 2012.
The Dutch Public Prosecutor’s Office states that Morgan Stanley established a Dutch subsidiary in 2006, known as Morgan Stanley Derivative Products (Netherlands) BV, or MSDPN.
Investigators say MSDPN acquired Dutch-listed shares for short periods around dividend dates and lent them out between those dates. During those brief ownership windows, the shares generated about €830 million in dividends.
MSDPN then offset €124 million in dividend withholding tax across five corporate income tax returns filed from 2009 to 2013.
Authorities say an average of 90% of the dividends flew abroad via Morgan Stanley & Co. International Plc to financial institutions that are not eligible to receive dividend tax compensation.
The fines, totaling €101 million, comes in addition to the tax and interest the bank already pays to the Dutch Tax Administration at the end of 2024.
The Dutch Tax Administration first identified the transactions in late 2010, prompting audits and years of tax litigation. Additional fact-finding by the FIOD (Dutch Fiscal Information and Investigation Service) uncovered what prosecutors describe as a closed circular structure used to route dividends and tax credits.
Just before the start of criminal proceedings the bank agrees to accept the €101 million in fines through penalty orders issued to the two involved entities. Prosecutors say this establishes the companies’ culpability.
The office says the penalty orders are appropriate because in criminal proceedings a court would also only be able to impose a fine on legal persons.
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The post Morgan Stanley Ordered To Pay $117,400,000 Fine for Dividend Tax Evasion Scandal appeared first on The Daily Hodl.
Dutch authorities are issuing a financial penalty against Morgan Stanley after concluding a long-running investigation into the bank’s handling of dividend withholding taxes. According to the Netherlands Public Prosecution Service, two Morgan Stanley entities in London and Amsterdam face penalty orders connected to a dividend tax structure operated between 2007 and 2012. The Dutch Public
The post Morgan Stanley Ordered To Pay $117,400,000 Fine for Dividend Tax Evasion Scandal appeared first on The Daily Hodl. Fintech, Regulators, bank, banks, fine, Morgan Stanley, News, tax evasion, US Bank, US banks
This articles is written by : Nermeen Nabil Khear Abdelmalak
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