Shell hasn't paid profit tax in Netherlands for years: report

Shell has not paid any profit tax in the Netherlands for years, despite earning billions of euros in the country every year, newspaper Trouw reports based on "well informed" sources and a confidential internal document from the Ministry of Finance.

Over the past decade Shell made profits ranging from 2 billion to 55 billion euros per year all over the world. Most of this was earned abroad, and the company was taxed in the country were the profits were made. In the Netherlands Shell derives income from its head office's activities, service stations, the chemical plants in Moerdijk, and the refinery in Pernis. All in all Shell made 1.3 billion euros in profit on those activities last year.

According to Trouw's sources, Shell has two main ways to brush away the profits made in the Netherlands, so as not to pay tax, using legal deductions. Firstly, the company can deduct interest in the Netherlands for loans that are used to invest abroad. And secondly, Shell charges losses suffered from, for example, the search for oil abroad, against the profit made in the Netherlands. Profits made by foreign oil extraction are not taxed in the Netherlands, but the losses made with that oil extraction may be deducted from Dutch profits.

A spokesperson for Shell told Trouw that it is not true that Shell does not pay profit tax in the Netherlands. But the company also refused to answer explicitly whether the company pays any proffit tax outside those paid by NAM - a joint venture with Exxon Mobil that falls outside the Shell group in the Netherlands.

The fact that Shell doesn't pay any profit tax in the Netherlands explains why the company lobbied so hard for dividend tax to be abolished, one source said to Trouw. "Abolishing the dividend tax is the only thing that offers anything to Shell", the source said. The further reduction in the profit tax rate, which the government announced after deciding not to scrap dividend tax after all, does not give Shell anything. "Shell pays zero euros in corporate tax. Then it makes no difference whether the tax rate goes from 25 percent to 20 percent. Zero remains zero."

According to Shell, there is no connection between how much profit tax the company pays and its plea for dividend tax to be abolished.