PwC Netherlands has paid a penalty of 300,000 euros ($356,505) for supplying incorrect and incomplete information to tax authorities. According to the Dutch Public Prosecution Service, the tax consultancy misrepresented the facts about a client’s tax return when inquired by the tax authorities. This put the treasury at risk of losing over 700,000 euros ($831,845).
The tax authorities had investigated the accuracy of a company’s tax return for 2014, prepared by PwC tax advisers. The return showed a capital gain of over 2.9 million euros for the PwC client without any tax being paid on it. When the tax authorities asked PwC for a clarification, there was a suspicion that PwC’s answer was incorrect. The Dutch Fiscal Information and Investigation Service (FIOD) then began its investigation into the matter in 2018.
The FIOD found that the untaxed capital gain was a result of an error by an external advisor. PwC failed to notice the error, even though it was clear that the documents the company had did not explain the capital gain in the tax return. PwC further failed to communicate this issue to the tax authorities. Instead, three PwC advisers drafted and submitted a letter interpreting the capital gain. However, the Dutch Public Prosecution Service sees this as a misrepresentation of facts. As such, the authority imposed a penalty of 300,000 euros ($356,505). Additionally, PwC has already taken some steps concerning its employees involved in the matter.