Zara criticised for €18 million tax dodge
Green party MEPs have uncovered loopholes allowing retail chain Zara to bilk governments across Europe out of €445 million, including €18 million in Belgium
Creative accounting
The holding company behind Zara, Inditex, paid no tax in Belgium as a result a €29.5 million deduction – or 30% of declared profit – in the period 2011-2014. That included a part of the company’s profit written off as payment of royalties for the use of the trade name Zara – a sum that goes to the Netherlands, which has a generous tax regime for profits gained from royalties.
For Belgium, those royalty payment came to €53 million, or twice as much as the profit reported. The Greens’ report looked at eight countries and found that Zara has escaped paying a total of €445 million in tax.
Inditex founder Amancio Ortega, who still owns 59% of the company, is the second-richest man in the world after Bill Gates, according to Forbes. The group also owns the brands Bershka, Massimo Dutti and Pull&Bear, with more than 7,000 stores in over 90 countries.
Green MEPs have previously published reports on the tax situation of Ikea and chemical company BASF.
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