In September, 2008, Koch Industries’ subsidiary, Invista B.V. – the maker of Lycra-brand fiber and Stainmaster-brand carpet – embarked on a complex 26-step restructuring of its operations in Luxembourg and the Netherlands, where the company is incorporated.
A document prepared by global tax advisory firm Ernst & Young and approved by the Luxembourg government details the restructuring and the tax consequences in Luxembourg of each transaction.
The documents are in the original French and were translated for the International Consortium of Investigative Journalists (ICIJ).
Here are five examples of transactions included in the restructuring that the Luxembourg government agreed would be exempt from tax.
1) Invista B.V. transfers $300 million to another Koch subsidiary called Arteva Global Holdings B.V. on Sept. 19, 2008, and ten days later Arteva transfers $175 million back. The transaction is considered a “hidden distribution” and is deemed exempt from income tax and municipal business tax by Luxembourg officials.