Media giant Viacom avoids billions of dollars in taxes across the Netherlands

creator SpongeBob, CSI On Mission: Impossible She has avoided taxes with the help of the Netherlands for nearly two decades. Media giant ViacomCBS channeled at least $32.5 billion (€26.6 billion) in revenue to Dutch companies between 2002 and 2019, which remained partly outside the control of the US tax authorities. Had the company correctly reported all income in its home country, ViacomCBS would have been nearly $4 billion poorer due to tax assessments.

This is evidenced by research conducted by the Research Foundation for Multinational Corporations (SOMO). A slight reservation about the numbers: due to the lack of transparency in the annual reports, it is possible that some of the “sales costs” paid to a branch in Curaçao are not part of a tax trick, but are related to the costs actually incurred. That doesn’t seem very likely.

ViacomCBS is one of the world’s largest film and television producers, and is owned by the American Redstone family. Just choose from the wallet: Nickelodeon, MTV, Comedy Central, Teenage Mutant Ninja Turtles, Shrek, Star Trek, Titanic On wolf of wall street. The company claims it reaches 700 million viewers.

royalties payment

According to Somo, tax evasion works like this: By far, the bulk of the programming is produced by ViacomCBS in the United States. approx view Jane the Virgin, Transformers Or a SpongeBob movie sponge of water Subsidiaries and foreign partners pay company royalties. This money does not flow directly into the country of production, because ViacomCBS has put the broadcasting rights in a place that is tax efficient. Discover Sumo In the years studied, the company used sites in Bermuda and Barbados.

The trick then is to get the royalties to the sunny final destination at the lowest possible cost – and that’s where the Netherlands comes into the picture. Flexible rules and a variety of international tax treaties make the Netherlands one of the most important transit countries in the world. ViacomCBS has engaged six Dutch companies since 2002, Somo reports, to collect royalties around the world and send them to a tax haven.

This is how you earn CBS International Netherlands BV from this series NCISAnd the Hawaii Five-O in a movie Beauty and the beast. Sumo writes that 72 percent of this Dutch company’s income in 2019 came from European Union countries. These countries are also seeing potential revenue leakages.

modest return

The Dutch Building Advantage consists of little labor and taxes paid by the six BVs. According to the agreements with the tax authorities, since 2011 ViacomCBS has had to leave 0.8 percent of its turnover in the Netherlands, as if it were a profit margin. In 2019, the Netherlands received $10.6 million (€8.7 million) in taxes from the six BV companies, with turnover of $1.15 billion.

Such agreements with tax authorities are intended to prevent ambiguity during tax returns, says professor of tax law Jan Flegert of Leiden University, who does not know the details of ViacomCBS structures. “You may be wondering why we still make agreements at all on structures intended to avoid tax.”

Returns may be modest, so the Netherlands makes money from construction. good news? “If you only look at the Netherlands, you will find every euro of tax included. In the meantime, you are eroding the tax bases of other countries,” says SOMO researcher Martin Hetland.

tax holiday

For a number of years Viacom CBS has used the Netherlands not only as a transit country, but also as a final financial destination – in line with Barbados and Bermuda. That was attractive because both the US and Dutch tax authorities assumed the other would tax these types of limited partnerships (CVs) — so no one taxed, Sumo reports. The rules have now been modified in such a way that the so-called CV/BV construction is no longer attractive.

Sumo discovered that the ViacomCBS tax party is not over yet, because the media conglomerate has a new tax structure. Dutch BVs now transfer royalties to the UK. Through the depreciation hoax, two subsidiaries in that country were able to create an item worth $1.2 billion, which could be offset against future profits.

ViacomCBS has not responded to inquiries from sincerely And previously did not comment on the report sent.

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