The US tax office is looking at the findings of the Pandora Papers case. Among them are Prime Minister Babiš's shops

U.S. Office of Internal Revenue Service (IRS), the US tax office, deals with the findings of the International Consortium of Journalists (ICIJ) arising from the Pandora Papers case. This was confirmed by Office spokesman Robert Marvin in response to Radiožurnál’s inquiries about Babiš’s transactions.

“The IRS investigation unit recorded information published by the ICIJ. Whenever such information appears, we carefully document it and consider how best to handle it, “Marvin wrote to Radiožurnál.

On Sunday, an international consortium of journalists, including the Czech server Investigace.cz, unveiled a complex network of companies owned by Babiš, through which in 2009 he bought real estate in France in worth less than 400 million crowns.

According to journalists, Babiš founded a total of three companies in the USA, Boyne Holding, in the USA. According to the experts consulted, the transactions carried out by the French real estate company could be taxed in the United States.

Boyne Holding owned a luxury residence on the French Côte d’Azur, namely: through its Monaco subsidiary called SCP Bigaud. Babiš sent the amount of $ 18.1 million for the purchase of real estate to Boyne Holding through a loan through an offshore company from the British Virgin Islands, Investigace.cz found out.

he refuses to do anything illegal. The last time in the pre-election debate of Czech Television. “Everything was according to the law. I did it according to the recommendation of the real estate agency, “he said on Wednesday.

Secret transfer to wife

French investigative journalists also pointed out that Babiš owned a luxury residence on the French Riviera through a foreign property structure for several years after his entry into politics, including part of the period when he held the position of Czech Minister of Finance. The situation did not change until the end of 2016.

At that time, the American company Boyne Holding transferred the shares of SCP Bigaud (the owner of the French property at the time) to the current wife of the Prime Minister Monika Babišová, then a friend of Andrej Babiš. According to Radiožurnál’s experts, Babiš’s company may have been required to pay taxes in America for the first time.

“Of course, in general, if there is a sale, such a the sale is taxable. And when it comes to a transaction between related parties, the transaction must be under market conditions. Especially in the USA, the observance of market prices is closely monitored, “explains Martin Houska, partner of Acredos.

The details of the transfer of shares of the company owning French real estate are not known. Although Babiš was Minister of Finance in the given year, and was thus obliged to publish property declarations, he kept the ownership of Boyne Holding secret from the public.

“Andrej Babiš had property declarations state both the ownership of their foreign companies and the income from the transfer of real estate to Monika Babišová. The fact that they are trying to cover up this information only increases the suspicion of the whole event, “says Milan Eibl, an analyst at the anti-corruption organization Transparency International.

. Babiš did not answer Radiožurnál’s question about how much his partner acquired the shares of SCP Bigaud. He also left unanswered the question of whether his company Boyne Holding paid tax on this transfer and in what amount.

The purchase of real estate in France cost him less than 400 million crowns in 2009. Since then, their value may have increased. Moreover, it is not certain whether Monika Babišová would have such a purchase. When asked how his partner saved funds for the acquisition of SCP Bigaud’s shares, Babiš also did not answer

In 2018, Babiš abolished Boyne Holding. The company therefore had to go through liquidation. If there were any money left in the company after its sale after the sale of its real estate subsidiary in France, it would be received by its owner and this balance would also have to be taxed.

” The Czech Republic at the moment when it receives the liquidation balance, it is taxed similarly to the dividend income. This means that he would be taxed at 15 percent, “Houska describes.

Radiožurnál also asked Babiš whether he had received a liquidation balance after the liquidation of his company Boyne Holding, whether he paid taxes on that income, and to what extent. However, he did not answer even that, although the liquidation took place at a time when he was already the Prime Minister of the Czech Republic.

Duty to tax

According to experts, it is also possible that Babiš’s company Boyne Holding donated shares in a real estate company in France to his partner Monika Babišová. In that case, however, the obligation to pay gift tax would fall on it.

“In America, especially in the case of a related party transaction, it will be perceived either as a hidden dividend payment and they will tax it with a dividend tax. Or they will consider it a kind of capital withdrawal from the company and they will tax it again, “Houska explains.

“Once the gift is from the company, it will not be possible to apply the tax exemption there,” he adds. In addition, it would be necessary to pay tax on such a gift in the Czech Republic, albeit reduced by the amount paid in the United States.

Monika Babišová subsequently transferred shares in SCP in 2018 Bigaud and holding Agrofert. Also due to this transaction, she could be obliged to pay tax, this time in the Czech Republic. Even Czech law requires that Babišová transfer the company’s shares to Agrofert at a price corresponding to its market value.

Also on how much his partner of the holding company Agrofert transferred the shares of SCP Bigaud and what tax she paid on the transfer, Radiožurnál asked Prime Minister Babiš. However, the Prime Minister left this unanswered. The Czech Financial Administration did not reply to Radiožurnál’s question whether it would deal with these transactions with reference to the duty of confidentiality

Babiš also had to pay taxes in France as part of the transactions. The server focused on the consequences of this complex operation

Neovlivni.cz . According to him, thanks to this operation, the prime minister was able to secure a reduction in real estate tax and also solidarity tax. However, the Prime Minister also left unanswered the question of what taxes he paid in France.

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