22 March 2016
Countermotion to shareholder meeting on 29 April 2016:
“Tax Dodging by BAYER continues”
The company BAYER is systematically transferring profits to low-tax countries such as Belgium or the Netherlands. The corporation thereby reduces its tax burden at the expense of taxpayers in Germany, the United States or France. The Coalition against BAYER Dangers has introduced a countermotion and will discuss the issue within the shareholder meeting on 29 April 2016.
BAYER has moved large parts of its equity to the Benelux countries. Netherlands-based Bayer Global Investments now accounts for EUR 12.2 billion, Bayer World Investments for EUR 14 billion and Bayer Antwerpen (Belgium) for EUR 11.4 billion. This is due to antisocial tax credits for international companies. In Belgium, for example, fictitious interest rates on a company’s equity can be deducted from tax as a notional “expense”. As a result, only minimal taxes are paid on profits. Bayer World Investments and Bayer Global Investments alone have holdings in around one-fifth of all 350 of the company´s worldwide subsidiaries. From the United States alone BAYER transferred shares worth EUR 1.4 billion to Holland.
The Coalition against BAYER Dangers demands an end to the destructive tax race. Jan Pehrke from the Coalition’s board says: “The fact that BAYER hardly contributes to community financing is unacceptable. The company is steadily abdicating its responsibility towards the general public at the expense of taxpayers, who have to pay for this behaviour through rising taxes and levies. It is high time to ensure that large companies take an appropriate share of the tax burden!“ The Coalition has officially introduced a countermotion to the upcoming BAYER annual shareholder meeting.
In order to benefit from special terms, BAYER is also concentrating its internal banking operations in Belgium. In 2014, BAYER Antwerpen alone granted loans of EUR 13.4 billion to other Group subsidiaries. In countries such as Germany or the United States, the interest owed on these loans reduces taxes. In Belgium, virtually no tax is payable, making an equivalent tax rate of less than 5% in some cases. This ongoing tax dumping recently became too much for even the European Union: at the beginning of January, it declared Belgium’s tax loopholes to be unlawful and demanded back-payments totaling EUR 700 million from 35 transnational companies.
The German city of Leverkusen, headquarters of BAYER, one of the most valuable European corporations, is losing the basis for its existence. The city is subject to budgetary supervision and must satisfy stringent savings requirements specified by the state of North Rhine-Westphalia. On account of its financial difficulties, Leverkusen is having to make drastic savings in the social and cultural areas. North Rhine-Westphalia’s Finance Minister Norbert Walter-Borjans criticized the fact that “a city like Leverkusen that is home to the BAYER global brand has to be supported from the communal financing pact - people find that hard to believe.” Walter-Borjans continues, emphasising that companies such as BAYER must pay their taxes in full: “Especially in tough budgetary times, we cannot afford for companies to systematically avoid paying their contribution to communal financing.”
BAYER has even relocated tax-relevant departments to the “Rhineland tax paradise” of Monheim. The town bordering Leverkusen to the north drastically reduced its business tax rate in 2012. A few months later, BAYER relocated its patent department to Monheim. Shortly before that, patent rights were placed in a new company called Bayer Intellectual Property GmbH. This move alone has saved BAYER around EUR 10 million in annual tax payments.