In just a few minutes, OCI shareholders, meeting on Thursday April 25 in Amsterdam, were enriched by 2.7 billion euros without paying a cent in tax. How ? Thanks to a simple trick, permitted by the legislation of the kingdom which, officially, nevertheless taxes dividends at 15%. The ploy, already used by other companies based in the Netherlands, was proposed by a specialist law firm to this listed giant, world leader in the production of fertilizers and melamine – an unbreakable resin.
The principle is “simple”: the shareholders vote for a first modification of the statutes, providing for an increase in the authorized capital (the amount of shares issued by the company) by an amount of 2.7 billion euros. The value of the share rises, the dividend is distributed. In the process, the assembly votes for a second modification, with the reduction of capital by the same amount of 2.7 billion euros. That’s it, with zero cents in tax.
Why ? Because the sum briefly injected was taken from the company’s reserves and escapes tax, by virtue of the principle which says that the money we already have can no longer be taxed: the 2.7 billion of euros in question were considered as capital, and not profit. The only constraint imposed by Dutch law is that the company’s statutes must be amended, with the approval of the shareholders.
There is no doubt, obviously, that in such a case, they do not need to be asked. Moreover, the OCI company has already used this practice over the last three years, reported Tuesday, April 23, the Dutch daily NRC. The State therefore lost 750 million euros. And without a change in the law, it is impossible for the tax services to prevent this situation, explains Jan van de Streek, professor of tax law at Leiden University. The environmentalist and socialist left are demanding measures, a government plan promised in 2018 has never seen the light of day and the tax services are reportedly carrying out an in-depth investigation, the results of which will be communicated “as a priority” in Parliament.
Rich Dutch families
OCI is majority-owned by the Egyptian Sawiris family and headed by Nassef Sawiris, 63, one of the empire’s founder’s three sons. He has a fortune estimated at 8 billion euros in 2021, according to the magazine Forbes, which he partly invested in Adidas and the English football club Aston Villa. The operation of Thursday, April 25 was made possible thanks, in particular, to the sale of a subsidiary of the group, Iowa Fertilizer Company, for 3.6 billion dollars (3.4 billion euros), in December 2023. The “gift” given to shareholders will bring, in any case, 1.4 billion euros to the Sawiris family alone which, according to NRCwill transit it to one of its companies in the Cayman Islands, via Cyprus.
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