French banking giant BNP Paribas has lost a tax avoidance case that could see it pay back £35 million to UK authorities.
It comes after a tribunal ruled in favour of HM Revenue & Customs (HMRC), which said the lender had tried to use a tax avoidance scheme known as “dividend stripping” that kept £35 million from UK taxpayers.
The bank is accused of trying to claim an exemption from tax by generating an artificial loss on the purchase and sale of dividends, without getting rid of the underlying shares.
Commenting on the ruling, Penny Ciniewicz, HMRC’s director general for customer compliance, said: “Tax avoidance doesn’t pay.
A tribunal ruled in favour of HM Revenue & Customs (PA)
“This decision adds to the comprehensive run of wins by HMRC in which the courts have found against the small minority of taxpayers who seek to avoid tax.
“Increasingly, companies and individuals who have tried to avoid tax are throwing in the towel and paying the tax they owe.”
BNP Paribas will not be appealing the tribunal ruling and said it took its tax obligations seriously.
A spokesman for the French bank said: “BNP Paribas respects the decision of the Tribunal in relation to this transaction, which was entered into 12 years ago in 2005.
“We did not appeal this decision and paid the tax amount in full before the tribunal was heard. BNP Paribas takes its tax obligations very seriously.
“We pay taxes fully in accordance with UK legislation; voluntarily adopted the Code of Practice on Taxation for Banks in 2009; and maintain an open and wholly transparent relationship with HMRC at all times.”