You Are Here: Home » Economy » Crisis-ridden Greece hit by tax avoidance through the Netherlands

Crisis-ridden Greece hit by tax avoidance through the Netherlands

Athens, 30 March 2015 – A new report by the Centre for Research on Multinational Corporations (SOMO) reveals that while Greece endures harsh austerity measures imposed by the European Commission, European Central Bank and IMF and supported by the Netherlands, Greece’s economic recovery is being undermined by large-scale tax avoidance – enabled by the Netherlands.

SOMO_report

Our report, Fool’s Gold , reveals that tax avoidance by Canadian mining company Eldorado Gold, which uses mailbox companies in the Netherlands, has led to tax losses of at least €1.7 million for Greece in the past two years. There are also serious environmental and human right concerns related to the company’s operations.

Eldorado Gold avoids tax

Eldorado Gold uses Dutch mailbox companies to avoid paying taxes while having no material operations in the Netherlands. Fool’s Gold has found that Eldorado Gold has a loan-financing structure that shifts interest payments from Greek subsidiary Hellas Gold SA, via Dutch mailbox companies to a Barbados entity where this income remains untaxed. If this financing structure persists, future profits from the project and related income tax can be expected to be substantially reduced, especially if practised in combination with other tax avoidance techniques widely used by extractive sector firms.

“The European Union and the Netherlands have double standards. On the one hand they impose harsh austerity measures which have devastating social and economic impacts in Greece; on the other hand they actively facilitate tax avoidance which costs the Greek state millions of euros,” says SOMO researcher Katrin McGauran.

Widespread tax avoidance through Dutch mailbox companies

Fool’s Gold shows that the case of Eldorado Gold is not an isolated one – rather, the Netherlands and Luxembourg are widely used tax conduit countries for foreign companies investing in Greece. The report shows that a staggering 80 per cent of direct investments from the Netherlands to Greece are routed through mailbox companies – an underreported issue in discussions on the causes of Greece’s budget deficit.

SOMO researcher Indra Römgens: “Tax abuse by large corporations operating in Greece and the facilitating role that EU law and Member States’ fiscal regimes play therein should be closely scrutinised by the new European Parliament’s special committee on tax rulings.”

Livelihoods threatened

Fool’s Gold reviews scientific evidence on the expected environmental destruction resulting from Eldorado Gold’s open-pit gold mining plans, corresponding to the size of 250 football fields. Mining is set to destroy local primeval forests in Halkidiki and the local community fears the mines will endanger lives through pollution. Aside from health concerns, this will destroy local jobs that depend on tourism, small-scale farming, forestry and fishing. Protests by the local community against the mine have been brutally repressed by police and criminalised by the Greek state. Amnesty International has repeatedly raised concerns about police misconduct and called on the Greek state to investigate. While the former government supported the company’s mining plans, the new government has promised to review its contract with Eldorado Gold.

“In its review of the mining contract the Greek government should conduct a cost-benefit analysis that scrutinises the company’s aggressive tax planning structure for legality, and quantifies not only expected future tax revenues and job creation, but also environmental, social and job losses expected to arise from the operations,” adds Katrin. “These damning findings should lead to the Dutch government ending its fiscal support for Eldorado Gold and radically reforming its tax system.”

Source:http://www.thepressproject.net/article/75130/Crisis-ridden-Greece-hit-by-tax-avoidance-through-the-Netherlands

 

 

 

 

 

 

 

 

 

 

 

About The Author

Number of Entries : 44

Leave a Comment

© 2011 Powered By Wordpress

Scroll to top