Morgan Stanley has been fined €101m by Dutch prosecutors for dividend tax evasion, following allegations that the bank’s Dutch subsidiary improperly claimed tax refunds through a special scheme.
The Public Prosecution Service (OM) accused the financial group’s Dutch subsidiary of temporarily acquiring shares in publicly traded Dutch companies specifically around dividend distribution dates.
This timing enabled the subsidiary to offset dividend taxes against other tax liabilities.
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After the dividend payout, the shares were transferred back to foreign parties.
Through this scheme, the bank avoided paying a total of €124m in dividend tax between 2009 and 2013.
Prosecutors argued that only organisations based in the Netherlands are allowed to offset this tax against other taxes.
However, in Morgan Stanley’s case, the majority of the dividends ultimately ended up with financial institutions outside the Netherlands.
The financial group has agreed to pay a €101m fine as part of a plea agreement, allowing the Public Prosecution Service to impose the penalty without judicial involvement.
This arrangement enables the bank to avoid a court trial.
Earlier this year, OM had stated that Morgan Stanley would be required to testify regarding the case, reported NL Times.
In 2024, Morgan Stanley reached a settlement with the Belastingdienst, the Dutch tax authority, concerning the disputed tax matter. As part of the agreement, the bank repaid the contested tax amount along with interest.
Earlier this year, in response to the summons, Morgan Stanley asserted that prosecutors had mischaracterised the situation and based their conclusions on incomplete investigations.
The bank has now expressed satisfaction that “this historic case, which related to corporate tax returns filed in the Netherlands over twelve years ago, has been resolved.”
Last month, Morgan Stanley signed an agreement to acquire EquityZen, a platform specialising in private share transactions.
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