The Dutch public prosecution department is investigating hundreds of transactions in which residents of other EU countries have used the Netherlands to avoid paying tax, the Financieele Dagblad says on Tuesday.

The Financieele Dagblad bases its claims on confidential legal documents and an interview with a main suspect – a Dutch national currently residing in Dubai.

The case, named Trust EU, centres on 26 suspects – 11 private individuals and 15 companies, the paper says. In total, the suspects have trust offices to process €123m through fake transactions, the paper states.

Trust office

The main suspect is 54-year-old Dutch national Erwin de Ruiter who lives in Dubai and heads up the Amsterdam trust office where the alleged fake transactions were made. He denies all the charges and says he has nothing to do with the day-to-day running of the Amsterdam office – Caute Groep.

De Ruiter told the paper it is notable that the public prosecution department is now investigating services which were recently offered by tax advisors and accountants as well as trust offices.

‘For decades, money from other EU countries has been moved through trust offices to tax havens,’ he said. ‘The Dutch tax authorities knew about it. The only rule was that Dutch nationals could not make use of it.’

France and Germany have for years been among the EU countries pressuring the Netherlands to block the loophole, but the Netherlands has said repeatedly this would conflict with tax treaties, the paper says.

In a statement, the finance ministry said since July 2012 only trust offices with a central bank licence have been able to offer this service.

The transactions under investigation focus on royalties, the FD says. Royalties earned abroad are not taxed in the Netherlands and individuals and companies make use of this by shifting their royalties through the Netherlands to avoid tax.