Morgan Stanley accepts €101m fine in Dutch tax evasion case
By Benjamin Chiou
Date: Thursday 27 Nov 2025
(Sharecast News) - Morgan Stanley has agreed to pay Dutch prosecutors €101m to settle a long-running case involving two of its subsidiaries in London and Amsterdam over alleged dividend tax evasion.
The Dutch Public Prosecutor's Office (PPO) said that value of the penalty orders, which are close to the statutory maximum, are in addition to the tax paid to the Dutch Tax Administration at the end of 2024.
The case, which dates back to a five-year period starting nearly two decades ago, relates to Morgan Stanley's treatment of so-called 'dividend withholding tax'.
Dutch law stipulates that anyone receiving dividends on Dutch shares they own must pay a dividend tax. However, if you are a Dutch resident, you can usually deduct this tax or ask the DTA for a refund - but only if you are the ultimate beneficiary of those dividends.
"The PPO is of the view that MS - through a specially designed structure - enabled parties, who were not entitled to credit or to reclaim dividend tax, to nonetheless be able to wrongfully obtain the benefit of a portion of the set-off dividend tax," the PPO said in a statement on Thursday.
The prosecutor claimed that Netherlands-based Morgan Stanley Derivative Products (MSDPN) received dividends of €830m between 2007 and 2012 on Dutch listed shares, which flowed automatically via the London office to underlying financial institutions that were not eligible for compensation. The bank then offset the dividend tax withheld on these dividends, totalling €124m, in five corporate income tax returns from 2009 to 2013.
The PPO concluded that MSDPN "had no legal right to do so", with the bank having "engaged in dividend tax evasion and intentionally filed false tax returns".
Just before the start of criminal proceedings, the bank agreed to accept the fines, meaning the case can now be closed, the prosecutor said.
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