The Special Tax Inspectorate (BBI) is targeting the Belgian companies of Randstad, the world’s largest staffing firm, with the tax authority imposing a fine of €72.68 million in tax claims against various Randstad companies, reports De Tijd (The Time). According to the authorities, an ‘artificial construction’ has been set up to divert profits made by Randstad companies in Belgium to Switzerland. “Thanks to a very favourable deal with the Swiss tax authorities, Randstad hardly pays tax on the money that flows into Switzerland from our country,” the authorities stated.

The Belgian Randstad companies, which include Randstad Belgium, Tempo-Team nv, Randstad HR Solutions and Randstad Group Belgium, have taken out loans from the Swiss branch of Randstad and paid the interest thereon with income from Belgium. Thanks to a ruling with the Swiss tax authorities, Randstad only pays 1.87% tax on the interest accruing in Switzerland. Without that favourable agreement, the statutory Swiss rate of 21.50% would apply, according to the authorities. In Belgium, the Randstad companies do not pay tax on these amounts, because they are already officially taxed in Switzerland.

The BBI has accused Randstad of tax abuse and the ‘artificial construction’ was mainly set up to avoid paying withholding tax in Belgium.

Earlier this year, the Dutch-speaking court in Brussels ruled in favour of the BBI. The judge decided that the Belgian Randstad companies that pay the interest to Switzerland do not meet the conditions not to pay withholding tax in Belgium. Because, according to the court, too little tax is paid in Switzerland. Randstad has said it would appeal. The group has also already pushed for a consultation between the Swiss and Belgian tax authorities.

Randstad is fully transparent about its tax strategy and global affairs and always acts cooperatively in the event of local tax audits,” Wim Van der Linden, Randstad Belgium spokesperson and external communications lead said. The Belgian Randstad companies have already paid a large part of the more than €72 million in disputed tax assessments. If the group is ultimately proved right, it will receive those amounts (plus interest) back from the state. SIA reached out to Randstad for further comment.