Dutch newspaper De Volkskrant and the website Follow the Money have today published a report detailing how Bain Capital may have been able to avoid $100 million in taxes by using the Netherland's tax laws.
The investigative report focuses on Bain Capital, where Mitt Romney was a key member of the management team until 1999, and its link to Dutch companies. Romney himself was still investing in the company until at least 2009, and appears to have received money from the group at a later date.
The alleged tax route went as follows: Bain bought Irish pharmaceutical company Warner Chilcott in 2004, which was originally registered in Bermuda but had moved to Ireland in 2009 to avoid Barack Obama's tax crackdown. Two years ago, Bain registered its interest in Warner Chilcott with the private Dutch company Alter Domus. Under Dutch laws if a Dutch-registered company owns more than 5 percent of a company it is exempt from paying capital gains tax.
The total value of avoiding that tax is thought to be around 80 million euros, or $100 million. De Volkskrant reports that Romney himself was able to personally gain from the move, largely due to the fact that the majority of his income from Bain after 1999 came from capital gains.
The tax system described by the article is so well-known it has its own name, a ‘Double Irish With a Dutch Sandwich’. Here's a graphic the New York Times made to describe it (it's also known to be used by Apple).
More From Business Insider
- Heartbreaking Photos Of The Shuttered GM Plant In Paul Ryan's Wisconsin Hometown
- One Of The Most Respected Polls In Ohio Shows Obama Barely Hanging Onto A Lead
- NATE SILVER: Obama's Odds Of Winning Have Now Hit 85%
- Investment & Company Information
- De Volkskrant
- Bain Capital
- Barack Obama
- Warner Chilcott