American media giant ViacomCBS avoids at least US$ 4 billion in profit tax via the Netherlands

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1 June 2021

For almost two decades, ViacomCBS has been using the Netherlands to avoid paying at least US$ 4 billion in corporate income tax in the United States. This is the main conclusion from the new SOMO report Keep Watching. The tax avoiding structures of ViacomCBS. From 2002 onwards, the media conglomerate has been sublicensing its television rights to third parties and consumers outside the North American market via the Netherlands. In total, at least US$32.5 billion in revenues have been collected by the company’s Dutch subsidiaries during the period 2002-2019.

Keep watching

By analysing the company’s annual reports, SOMO was able to ascertain that the Dutch government provided ViacomCBS with so-called “rulings”, or tax agreements, as far back as 2002. Through these rulings, the Dutch government has ensured that only a small part (since 2011 specifically referred to as 0.8%) of the billed royalty of ViacomCBS subsidiaries in the Netherlands have been subject to taxation there.

“The research shows that multinational companies such as ViacomCBS alter their international tax structures repeatedly to circumvent the payment of taxes. In other words, ViacomCBS is playing a continuous game of mouse and cat with national tax revenue authorities”, says SOMO researcher Maarten Hietland.

Following the demerger of Viacom into CBS Corporation and Viacom at the end of 2005, Viacom and CBS shifted its IP licensing rights several times to Curaçao, Luxembourg, the Netherlands, Bermuda and Barbados and, eventually, in 2019, to the UK. In late 2019, Viacom and CBS Corporation remerged into ViacomCBS.

Due to the sale of IP licensing rights via low-tax jurisdictions and non-taxed entities, the UK government is expected to lose an estimated $365 million (through Viacom’s IP sale) and $855 million (through CBS Corporation’s IP sale) in corporate income tax.

ViacomCBS

ViacomCBS is known for TV channels like Nickelodeon and MTV, blockbusters like Titanic and Spongebob and series like Star Trek. The company has a history of mergers and splits. In 2005, Viacom and CBS split, only to merge again in December 2019. The SOMO research looks at the separate and merged companies in the 2002-2019 period.