Case Study: Dutch banks and tax avoidance A research paper prepared for the Eerlijke Bankwijzer (Dutch Fair Bank Guide) Case Study: Dutch banks and tax avoidance A research paper prepared for the Eerlijke Bankwijzer (Dutch Fair Bank Guide) Jan Willem van Gelder Joeri de Wilde Publication date: 3 September 2014 ``` Naritaweg 10 1043 BX Amsterdam The Netherlands Tel: +31-20-8208320 E-mail: [email protected] Website: www.profundo.nl Contents Summary ..................................................................................................................... i Samenvatting .......................................................................................................... viii Introduction ................................................................................................................ 1 Chapter 1 Background: Banks and international tax avoidance ................... 2 1.1 What is international tax avoidance? ...................................................... 2 1.2 Corporate taxes ......................................................................................... 3 1.2.1 Corporate income taxes .............................................................................. 3 1.2.2 Withholding taxes on dividend, interest and royalties .................................. 3 1.2.3 International tax treaties .............................................................................. 4 1.3 Tax havens ................................................................................................ 5 1.4 Forms of international tax avoidance by companies.............................. 8 1.4.1 Holding shell companies ............................................................................. 8 1.4.2 Trading shell companies ........................................................................... 10 1.4.3 Financing shell companies ........................................................................ 11 1.5 International tax avoidance by individuals ............................................ 13 1.6 Who pays the bill? .................................................................................. 13 1.7 Banks and international tax avoidance ................................................. 14 1.7.1 Banks avoiding their own taxes ................................................................. 15 1.7.2 Services of banks to multinationals avoiding taxes .................................... 15 1.7.3 Services of banks to wealthy individuals avoiding taxes ............................ 16 Chapter 2 Methodology ................................................................................... 17 2.1 Objective .................................................................................................. 17 2.2 Banking groups researched ................................................................... 17 2.3 Research approaches ............................................................................. 18 2.3.1 Subsidiaries in tax havens ......................................................................... 18 2.3.2 Special purpose vehicles for international loans or issuances ................... 19 2.4 Conclusions and recommendations ...................................................... 20 2.4.1 Preliminary conclusions ............................................................................ 20 2.4.2 Scoring ...................................................................................................... 20 2.4.3 Feedback period ....................................................................................... 20 2.4.4 Recommendations .................................................................................... 20 Chapter 3 ABN Amro ....................................................................................... 21 3.1 Introduction ............................................................................................. 21 3.2 Subsidiaries in tax havens ..................................................................... 21 3.2.1 Active subsidiaries .................................................................................... 21 3.2.2 Inactive subsidiaries .................................................................................. 22 3.2.3 Conclusions .............................................................................................. 24 3.3 Financial services provided to special purpose vehicles .................... 26 3.3.1 Seaborne Intermodal ................................................................................. 26 3.3.2 Apical ........................................................................................................ 27 3.3.3 Gunvor Group ........................................................................................... 28 3.3.4 Floatel International ................................................................................... 29 3.3.5 Credit Suisse ............................................................................................. 30 3.3.6 Conclusions .............................................................................................. 30 3.4 Response ABN Amro .............................................................................. 30 Chapter 4 Aegon .............................................................................................. 31 4.1 Introduction ............................................................................................. 31 4.2 Subsidiaries in tax havens ..................................................................... 31 4.2.1 Active subsidiaries in tax havens ............................................................... 31 4.2.2 Former subsidiaries of Aegon ................................................................... 32 4.2.3 Conclusions .............................................................................................. 32 4.3 Financial services provided to special purpose vehicles .................... 34 4.4 Response Aegon ..................................................................................... 34 Chapter 5 ASN Bank ........................................................................................ 35 5.1 Introduction ............................................................................................. 35 5.2 Subsidiaries in tax havens ..................................................................... 35 5.3 Financial services provided to special purpose vehicles .................... 35 5.4 Response ASN Bank ............................................................................... 35 Chapter 6 Delta Lloyd ...................................................................................... 36 6.1 Introduction ............................................................................................. 36 6.2 Subsidiaries in tax havens ..................................................................... 36 6.2.1 Active subsidiaries in tax havens ............................................................... 36 6.2.2 Conclusions .............................................................................................. 36 6.3 Financial services provided to special purpose vehicles .................... 37 6.4 Response Delta Lloyd ............................................................................. 37 Chapter 7 ING ................................................................................................... 38 7.1 Introduction ............................................................................................. 38 7.2 Subsidiaries in tax havens ..................................................................... 38 7.2.1 Active subsidiaries of ING Group .............................................................. 38 7.2.2 Subsidiaries of NN Group .......................................................................... 39 7.2.3 Inactive subsidiaries of ING Group ............................................................ 40 7.2.4 Conclusions .............................................................................................. 40 7.3 Financial services provided to special purpose vehicles .................... 43 7.3.1 Seaborne Intermodal ................................................................................. 43 7.3.2 China Shipping Overseas Finance ............................................................ 45 7.3.3 Gunvor Group ........................................................................................... 47 7.3.4 Seajacks International ............................................................................... 47 7.3.5 Allied World Assurance Company ............................................................. 48 7.3.6 Emirates NBD Tier 1 ................................................................................. 48 7.3.7 ADCB Finance (Cayman) .......................................................................... 49 7.3.8 Credit Suisse Guersey Branch .................................................................. 49 7.3.9 Conclusions .............................................................................................. 50 7.4 Response ING ......................................................................................... 50 Chapter 8 NIBC ................................................................................................ 51 8.1 Introduction ............................................................................................. 51 8.2 Subsidiaries in