Danes accuse MAp over tax loophole
Sydney Morning Herald
Friday April 1, 2011
MAp Airports and its former manager, Macquarie Group, have been accused of exploiting a tax loophole in Denmark to avoid paying an estimated $100 million of tax on earnings from the country's main airport at Copenhagen.Henrik G’rtler, the chairman of Copenhagen Airport in which MAp has a 30.8 per cent stake, said the allegations aired in Denmark's largest broadsheet Politiken on Wednesday were "simply not true".But Mr G’rtler called for Danish tax authorities to "immediately investigate the accusations"."As a partially state-owned business with a significant impact on Danish growth and employment, naturally we cannot accept being associated with accusations of tax evasion, and for this reason the matter must be investigated," Mr G’rtler said in a statement.The Danish state owns 39 per cent of the airport. On top of MAp's stake, the Macquarie-managed Macquarie European Infrastructure Fund 3 has a 26.9 per cent stake.Politiken carried allegations that MAp was not paying withholding tax on the 500 million kronen ($92 million) it was transferring each year from the airport to Bermuda.Citing "unpublished accounts" it had seen, the newspaper said the former Macquarie-managed fund had cost the Danish state 550 million kronen in lost taxes since it purchased a stake in Copenhagen Airport in 2005. In Denmark, the withholding tax rate is 25 per cent.The tax loophole allegedly involved funds being transferred from the airport each year as interest on the 11.65 per cent convertible notes held by MAp and the Infrastructure Fund in a Luxembourg fund that has the direct stake in the Copenhagen Airport.The newspaper report came the same day Copenhagen Airport held its annual meeting in the Danish capital and announced the appointment of a new chief executive. MAp said it was confident that any investigation would prove no wrongdoing."We are confident we meet tax regulations in all the jurisdictions we operate in," a spokesman said.According to its 2010 annual report, MAp's indirect stake in the airport is "held by" its Bermuda-based subsidiary MAp Airports International Limited (MAIL).MAIL holds the stake through convertible notes in the Luxembourg-based fund, Copenhagen Airports S.a.r.l, which has the direct interest in the airport.