British American Tobacco (BAT) Netherlands, the tobacco manufacturer behind brands such as Lucky Strike and Dunhill, has been fined 107 million euros (1300 crore BDT) following a dispute with the Dutch Tax Authority. This confirmation came after a ruling by the court in Noord-Holland. According to the court, BAT’s profits were approximately 1.8 billion euros higher than what was reported to the Tax Authority. In addition to the fine, taxes must also be paid on the profits.
BAT has companies in the Netherlands and abroad. For the numerous transactions between these companies for the production and distribution of the products made by the tobacco manufacturer, they have agreed upon compensation. The Tax Authority claimed that a portion of these compensations cannot be considered “business-related,” meaning they exceed the market price.
As a result, the Dutch branch of BAT is accused of deducting excessive costs from its profits, leading to underpayment of taxes over several years. Additionally, incorrect declarations were made in the transfer of activities from the Dutch company to the group firm in the United Kingdom.
The Tax Authority expressed satisfaction with the court’s ruling. In contrast, a spokesperson for BAT stated the opposite, indicating the company is considering an appeal. BAT also said it complies with tax legislation in all markets where it operates.
