Research results released by the Centre for Multinational Enterprises (SOMO) reveal that German coronavirus testing maker and biotech giant Qiagen (NYSE: QGEN) have dodged millions of euros with taxes since 2010 thanks to Ireland, Luxembourg, Malta and the US tax avoidance builds.
In a report, Somo said Qiagen is acting as a leading producer of the Covid Test Kit and is now benefiting from the massive orders made by “government around the world.”
Speaking about the findings, SOMO tax researcher Jasper Van Teeffelen said: It’s disastrous to see companies like Qiagen eschew taxes on a scale and take away the government from much-needed revenue. ”
How did Qiagen leave it?
The company itself has a operating headquarters in Germany, but it is officially headquartered in Venlo, the Netherlands. With its second quarter profit boasting a profit of 77 billion euros (a level twice the same period last year), SOMO has made it clear that the company has not paid proportional tax on these profits. Instead, Somo described Qiagen’s tax structure as a European tax haven (a network of letterbox companies mentioned above) that is used to avoid taxes via internal loans between subsidiaries.
Essentially, it underestimates the true nature of taxable profits by transferring revenues to low-tax jurisdictions such as Luxembourg. These transfers occur via loans, where the main company pays a disproportionate interest payment to the letterbox or subsidized company. Like “facilitation payments,” which replace past bribery, false “interest rates” are a form of e-music expressions that hide unpleasant, yet financially wise transactions.
Qiagen loan structure, SOMO graphics
According to SOMO estimates, Qiagen is avoiding paying 93 million euros of tax, along with a cumulative tax credit. SOMO adds that this is a conservative presumption given that not all of the potential avoidance structures are considered. The report focuses on inter-business loans, but also mentions tax avoidance on interest income from Qiagen loans to the US.
Reacting to what the research group revealed, SOMO tax researcher Vincent Kiezebrink commented.
“It’s shocking to see how difficult it is for this biotech giant to avoid taxes. We are calling on Qiagen and the EU to end such tax avoidance schemes.”
Take away from the public and don’t return their fair share.
Qiagen does not pay fair taxes on profits and receives a large number of public funds, particularly from both the US and Dutch governments. For example, we received 511,000 euros from the US Department of Health, which will help accelerate the development of new Covid tests. Subsequent testing is now being manufactured and raised on a large scale again using public funds by the Netherlands, the US and other countries around the world.
Somo’s view is that government intervention must intervene. This is the latest in a catalogue of intense tax-free avoidance schemes by large corporations who willingly benefit from the countries in which they operate without feeling the obligation to reciprocate against those who have promoted success.
Organisations such as the EU and Dutch governments have to implement strict rules through public fund allocations and make tax avoidance infrastructure more stringent.
Wemos, a Dutch nonprofit group, Global Health Lobbyists, published its own research into public funding for drugs in 2019, highlighting recommendations from the SOMOS report.
“We’ve got a lot of effort into making it,” said Ella Weggen, WEMOS Global Health Advocate. This public fund must be conditioned in terms of affordability and accessibility so that people actually benefit from drugs and medical devices developed with taxpayer money. ”
