The Belgian tax authorities are demanding 380 million euros from Ahold Delhaize. The dispute goes back to the acquisition of the American Delhaize branches during a restructuring in 2018.
How much is it worth?
Two years after the merger of the two supermarket groups in 2016, Ahold Delhaize carried out a simplification of its structure in the United States. However, the Belgian tax authorities now have serious doubts about the price Ahold paid in 2018 for the acquisition of the stores.
After paying a handsome sum for Delhaize subsidiaries Food Lion and Hannaford, the Dutch retail group then absorbed them into a new, consolidated American structure. As a result, there is now only one CEO for all operations in the US and the group is only required to file one tax return there.
The question is whether the right price has been paid for the American branches. The company itself firmly claims that it did: it did ask an investment bank to prepare a valuation report to ensure they would pay a fair price. In this way, the group wanted to avoid having to pay taxes on the transaction later.
Long and uncertain
Yet the Belgian tax authorities do not agree, Belgian newspaper L'Echo reports: they say that the former Delhaize stores were worth more than what was paid for them. The tax authorities are therefore now demanding 380 million euros from the supermarket group. Still, it will take a while before the government will actually receive the sum (if at all): Ahold Delhaize promises to fight tooth and nail to defend itself and has already referred to legal options in its annual report.
The tax authorities will have to prove that the stores are indeed worth more and why they reject the valuation report of a renowned investment bank. If the matter goes to court, the court will also have to have the value of the stores recalculated by an expert. In short, the case could drag on for a very long time, and nothing is certain yet about the outcome.