Anorak | Those Tax Dodging Scumbags At Zara!

Those Tax Dodging Scumbags At Zara!

by | 26th, February 2014

WE’RE well used to hearing stories about how the tech companies, Apple, Google and the like, are dodging taxes all over Europe. But people are starting to realise that it’s not just that sector. Many other multinationals are indulging in very much the same behaviour :

Another reason for Inditex’s industry-best profit margins of almost 15 percent: the company uses the kind of tax loopholes coming under increasing scrutiny from international regulators.

In the past five years, Inditex has shifted almost $2 billion in profits to a tiny unit operating in the Netherlands and Switzerland, records show. Although that subsidiary employs only about 0.1 percent of Inditex’s worldwide workforce, it reported almost 20 percent of the parent company’s global profits last year, according to company filings.

Inditex is the company that owns Zara….so there’s another place you can’t go and buy your clothes from.

Well, actually, sorta. Because what they’re doing is that they’ve got the brand names, the people who know how to design a shop and all that, stashed away in a Dutch company. All the stores and companies that own stores in different countries must pay royalties and fees to that company. That’s the allegation: that these royalties are in some manner dodging tax as a result.

There’s two problems with this. The first is that the company can only delay tax by this method. If they take the profits out of the Dutch company and send it to HQ so that it can be spent on dividends, returned to shareholders which

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Posted: 26th, February 2014 | In: Money, News, The Consumer Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink