Fiscal route through the Netherlands: 57 Billion Euro’s

Amsterdam – The world’s largest multinationals have set up hundreds of new financial entities  in the Netherlands since 2005. This is apparent from an examination, conducted by de Volkskrant, of the annual reports of the hundred largest multinationals and their subsidiaries in the Netherlands. 

In 2011 these multinationals managed to funnel at least 57 billion euro’s through the Netherlands, whilst hardly paying any taxes. Google, IBM, and ENI funneled the most through the Netherlands. The de Volkskrant research shows that the Dutch tax burden for these letterbox companies is not easily known, but it is certainly very low. Most of these companies have negotiated confidential agreements with the Dutch Tax authorities, resulting in payment at rates between zero and five percent tax for the money they booked in transactions from and to the Netherlands.

For these transactions the firms used around a thousand letterbox companies, most of which have been established in the Netherlands quite recently.  Moreover, the companies, such as Google, Microsoft, Gazprom and Wal-Mart, manage a variety of these entities to lower their tax burden.

Especially abroad there is much commotion about these Dutch financial offshoots. Because of the tax shelters, large corporations pay less and less taxes.  And fewer tax revenues have caused governments worldwide  to raise taxes on their citizens or to cut in public services.

The research shows that 91 out of the 100 largest international corporations operate in the Netherlands. At least sixty of those use the Netherlands for tax sheltering purposes;   another seventeen corporations there are strongly suspected of similar activity. .

For some time now, the Netherlands have been under fire because of the tax benefits that foreign companies can gain in our country. Last year, to the indignation of many British, it was shown that the coffee chain Starbucks used letterbox companies via the Netherlands to avoid payment on virtually all taxes in the United Kingdom.

Minister Weekers has to answer to the parliament today on the subject of these tax shelters.. Members of parliament are demanding insight into the size of tax avoidance in the Netherlands. However, the taxing authorities have not been very forthcoming in providing information up to now.

The de Volkskrant research reveals the enormous expansion of tax schemes in recent years. The Netherlands are considered a safe haven for the payment of dividends, interest and royalties (the income from intellectual property rights, including the rights to music, software and brands) which are not taxed in the Netherlands.

When compared to the enormous flows of money involved, the benefits to the Netherlands are small. Approximately a thousand people are employed in the tax-avoidance industry, and the estimated revenue for the treasury is a billion euros.


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