Diamond companies hid profits in tax haven Author: MB

Belga
Sat 18/11/2017 - 16:24 MB Diamond companies in Belgium concealed hundreds of millions of euro in profits from Inland Revenue. That’s according to calculations made by the financial daily ‘De Tijd’. Since the introduction of the so-called “Karat Tax” earlier this year, diamond companies are no longer taxes on their profits, but on their turnover.

Previously, diamond companies were able to get away with paying relatively little tax on their profits by creating a smoke-screen around how many diamonds they had in stock.

This changed when the Federal Government introduced the Karat Tax and tax revenue from the diamond industry has increased as turnover figures are much more difficult to manipulate that profit figures.

De Tijd writes that tax revenue from the diamond industry has increased three-fold since the changes came into force.
However, the Karat Tax has had an interesting side effect.

Since it came into force diamond companies’ profits have increased twelvefold. These profits have no doubt always existed. However, now it is no longer worth trying to conceal them in tax havens such as Dubai.

The industry withheld the profits from its books to achieve tax optimisation, something that of course is not illegal.