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Daily Dutch News in English

Netherlands is a tax haven for multinationals

Dutch multinationals pay barely any tax on their profits in the Netherlands. The Dutch treasury is missing out on 16 billion euros of corporate taxes a year – or 2,200 euros per capita.

The figures emerge from a study by Utrecht University commissioned by the television documentary programme Zembla. The team behind the study was headed by tax law professor Geerten Michielse, who also works for the International Monetary Fund and the World Bank. He told RNW that the United States was right to describe the Netherlands as a tax haven in May this year – an assertion which the White House subsequently withdrew following Dutch finance ministry protests.

Multinationals such as Boeing, US Steel and Walt Disney all have Dutch letter-box companies to avoid paying tax in the United States. On paper, US companies make 13 percent of their profits in the Netherlands. The study found that while multinationals are officially liable to pay 25.5 percent in corporate tax, in reality loopholes in the tax law allow them to get away with paying no more than six or seven percent.

Tax officials have discussed the problem several times, but up to now have not intervened. The fear that Dutch multinationals with higher tax burden shift to other countries is unjustified. As long as profits are taxed, companies will come up with new constructions for profit tax evasion.

source: Radio Netherlands Worldwide

Photo by: Andrew