The Dutch Public Prosecutor has fined two Morgan Stanley (MS) entities in London and Amsterdam a total of 101 million euros, or about $117 million, for dividend tax evasion. Officials said that this penalty is separate from the tax bill the banking giant already settled with the Dutch Tax Administration at the end of 2024, which included the original taxes plus interest. Together, this closes out a long-running investigation into how the bank handled dividend-related taxes.
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It is worth noting that Dutch law allows shareholders based in the Netherlands to reclaim or offset dividend taxes, but most foreign investors are not allowed to do so. According to prosecutors, Morgan Stanley used a special structure that let parties who were not eligible claim these rebates anyway, which the authorities say violated tax rules. Earlier this year, the prosecutor planned to take the bank to court, but Morgan Stanley agreed to accept the fine just before criminal proceedings were set to begin.
Morgan Stanley said that it was “pleased to have resolved this historical matter,” and explained that the issue involved corporate tax filings in the Netherlands that were made more than 12 years ago. For investors, the settlement removes a lingering legal overhang and limits the risk of additional penalties. While the fine is sizable, the company’s tone suggests that it sees the case as an old problem that will not affect its current business operations.
Is Morgan Stanley Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on Morgan Stanley stock based on seven Buys, seven Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average Morgan Stanley price target of $176.08 per share implies 4.9% upside potential.
