NEW YORK CITY (dpa-AFX) - The Dutch Public Prosecutor's Office or PPO has imposed fines totaling 101 million euros on two Morgan Stanley companies in London and Amsterdam for dividend tax evasion. The penalties, close to the statutory maximum, come on top of taxes and interest already repaid to the Dutch Tax Administration at the end of 2024.
According to the PPO, Morgan Stanley set up Morgan Stanley Derivative Products (Netherlands) BV in 2006 to acquire Dutch shares around dividend dates. Between 2007 and 2012, the company received 830 million euros in dividends and offset 124 million euros in withholding tax in corporate tax returns, despite not being entitled to do so. Investigators found that most of the dividends flowed abroad to institutions not eligible for tax credits, leading the PPO to conclude that Morgan Stanley intentionally filed false tax returns.
The transactions were first flagged in 2010, triggering years of audits and litigation. Just before criminal proceedings were due to begin, Morgan Stanley accepted the fines in the form of penalty orders, allowing the case to be closed with respect to the two companies.
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