06/10/20

MALTA: COVID-19 test producers Qiagen dodge millions in tax via jurisdiction, according to report.

As published on timesofmalta.com, Monday 5 October, 2020.

One of the leading producers of COVID-19 testing kits used Malta to dodge millions in taxes, a new report has found.

According to the Centre for Research on Multinational Corporations, biotech giant Qiagen used a network of offshore structures, including Malta, to "aggressively avoid taxes at the expense of the general public".

Qiagen is one of the leading producers of COVID-19 testing kits and has seen its profits shoot up since the start of the pandemic.

The Dutch research centre found that although Qiagen is originally a German company and its operational headquarters are located in Germany, it had registered its parent company in the Netherlands.

The firm then used inter-company loans from the Netherlands to its subsidiaries in "European tax havens Malta, Ireland and Luxembourg" to avoid corporate income tax back in Holland.

Based on an in-depth investigation of two alleged tax avoidance structures used by Qiagen, the research centre estimates the company has accumulated illegitimate tax credits and avoided Dutch corporate income tax to the tune of €142 million.

In the first of two cases explored in the report, Qiagen took advantage of legal mismatches between the United States and Luxembourg, and Luxembourg and Ireland, to avoid approximately €93 million in Dutch income tax between 2010 and 2018.

In the second case, Qiagen set up an intercompany loan structure in Luxembourg and Malta, which enabled the company to accumulate up to €49 million in illegitimate tax credits.

The report says that Qiagen used a "well-known tax avoidance technique” which saw fictitious interest payments on inter-company loans.

These allegedly bogus loans were described as "a financial merry-go-round of debt and interest” designed to help the big-pharma firm avoid millions in taxes.

The European Commission is currently investigating whether the use of this technique by other companies constitutes illegal state aid.