The Belgian tax authorities are ready to present a bill for up to €380 million to Ahold Delhaize, the parent company of the Belgian supermarket chain.
In 2006, when Ahold – the Dutch company that owns Albert Heijn supermarkets and the online retailer Bol.com – made an offer to Delhaize, it was an independent company with properties in Belgium, Eastern Europe and the United States, where it trades as Food Lion and Hannaford.
The Ahold deal included those overseas properties, but Ahold decided to integrate the US properties into its own subsidiary that was already dealing with the US market. In order to make that happen, Delhaize sold the US properties to Ahold Delhaize, of which Delhaize was already a part.
“The goal was to simplify the legal structure and file a single consolidated federal tax return in the US,” Ahold Delhaize and Delhaize wrote in their annual reports at the time.
By that time Delhaize was a wholly-owned part of Ahold – the addition of Delhaize to the name was a politeness – however the parent company brought in external consultants to advise on what would be a fair price for Food Lion and Hannaford. And the result turned out to be a price at which neither parent nor daughter would have to pay any tax.
The Belgian tax authorities have gone over the agreement, and the external advice on which it was based, and they are having none of it. Ahold paid much less than the properties were worth, but since Delhaize was now part of Ahold, nobody raised any objection. Until now.
The figure of €380 million has not been announced officially, but it represents four times the amount the Belgian stores – both Delhaize and Albert Heijn – made in 2019. The sum paid by Ahold Delhaize for the US stores has also never been revealed.
Ahold Delhaize, needless to say, has rejected the tax authorities’ claim, and pledged in its annual report to ‘resist and defend itself’ strongly.
The talks between the two sides are currently at a standstill.