Macquarie $100m tax rort claim
The Age
Friday April 1, 2011
MAp Airports and its former manager stand accused of exploiting a Danish loophole, writes Scott Rochfort. MAP Airports and its former manager, Macquarie Group, have been accused of exploiting a tax loophole in Denmark to avoid paying an estimated $100 million of tax on earnings from the country's main airport in Copenhagen.Henrik Gurtler, chairman of Copenhagen Airport, in which MAp has a 30.8 per cent stake, said the allegations in Denmark's largest broadsheet, Politiken, on Wednesday were "simply not true".But Mr Gurtler called for Danish tax authorities to investigate the accusations immediately."As a partially state-owned business with a significant impact on Danish growth and employment, naturally we cannot accept being associated with accusations of tax evasion, and for this reason the matter must be investigated," Mr Gurtler said.The Danish state owns 39 per cent of the airport. On top of MAp's stake, the Macquarie-managed Macquarie European Infrastructure Fund 3 has a 26.9 per cent stake.A report in Politiken carried allegations that MAp was not paying withholding tax on the 500 million kroner ($A92 million) it was transferring each year from the airport to Bermuda.Citing "unpublished accounts" that it had seen, Politiken said the former Macquarie-managed fund had cost the Danish state 550 million kroner in lost taxes since it purchased a stake in Copenhagen Airport in 2005.Denmark's withholding tax rate is 25 per cent.The Copenhagen Airport chairman declined to speak for MAp."Obviously, I am not familiar with internal matters of the Danish holding company, CAD (Copenhagen Airports Denmark), owned by the Macquarie Group," said Mr Gurtler said. "It goes without saying, however, that CAD must comply with Danish tax laws."The tax loophole allegedly involves money being transferred from the airport each year as interest on the 11.65 per cent convertible notes held by MAp and MEIF in a Luxembourg fund that has the direct stake in Copenhagen Airport.Danish Finance Minister Claus Hjort Frederiksen told the paper: "I have no way of knowing whether things have been done according to the rules, but I would urge the tax authority to run a check."The newspaper report came on the same day Copenhagen Airports held its annual meeting in the Danish capital and announced the appointment of a new chief executive. MAp said it was confident any investigation would prove no wrongdoing."We are confident that we meet tax regulations in all the jurisdictions we operate in," a MAp spokesman told BusinessDay.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 (CASA), that has the direct interest in the airport.
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