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Dozens of multinationals base their brand rights in Holland

Thursday 15 November 2012

Dozens of multinational companies have based their branding rights in the Netherlands in order to reduce their tax bills, the Financieele Dagblad reports on Thursday.

Earlier this week, US coffee giant Starbucks came under attack in a British parliamentary commission for using the Netherlands to get round British taxes. Starbucks UK pays a fee to its Dutch arm for using its branding and coffee recipes, so cutting its tax bill.

Ikea has made a similar move, and research by the FD shows numerous international firms including SABMiller, Nike, Bacardi-Martini, Zara, Speedo and Volkswagen have set up similar financial constructions. All these firms also have financial holding companies in the Netherlands.

‘There are very, very many’ companies which have made this move, a tax advisor told the paper.

Legal construction

The Netherlands is increasingly becoming a ‘switching centre’ in this sort of construction, the FD quotes Jan Pieter Hustinx from law firm De Brauw Blackstone as saying.

The constructions are completely legal but companies are reluctant to talk about them in order to avoid the veneer of tax evasion, the paper said.

The paper says branding rights are rarely included in financial reports and only appear in the Benelux brand register when there is an intellectual property issue.


Brewing group SABMiller is an exception in its openness, the paper says. It has set up a special limited company in the Netherlands which manages its brand rights. For example, the brand rights to Castle Lager sold outside of South Africa are owned in the Netherlands, if not in the relevant African countries, SABMiller says.

The paper says in some countries, royalties based on intellectual property can be taxed at up to 30%. However, in the Netherlands, advance deals with the tax office mean incoming royalties are taxed in some cases at 7%, making the move on paper very beneficial.

These tax agreements are secret but the finance ministry is looking into their implications, the FD said.

‘I think politicians are going to pay more attention to this in the future,’ Karin McGauran of the Somo research group told the FD. ‘This system is unique to the Netherlands and other EU countries are not always happy about it.’

Do you work for one of the companies named? What do you think?

© DutchNews.nl


Readers' Comments

It is better that they are located in NL than in Asia or elsewhere in the world. I think gov should rely less on income from corporation tax if they want to solve their unemployment situation.

By ufo | 15 November 2012 9:06 AM

Actually the article had some major flaws. For instance VW does not have patents or licences in the Netherlands. It does have financing branches but that is not the same. Actually if you check the regulatory authority website and the chamber of commerce site you see that they are not a empty company but employ 15 people in the Netherlands. In addition it is not correct that the Netherlands are unique in having a ruling practice actually the majority of the developed countries have some sort of ruling practice, e.g. the US, Luxembourg, Ireland, Switserland, Australia, etc etc.

By xxx | 15 November 2012 9:44 AM

Let's have a level playing field. How can an individual brand his/her income in the Netherlands to avoid taxation. If the law is legal than let it be available to non-corporate entities.

By roland | 15 November 2012 1:17 PM

Low taxation is the only way to bring economy and business...

By Mike | 15 November 2012 1:54 PM

I worked for one of these companies listed in the article and have to say that the operation was a total sham, clearly built up to legitemise the dodgy tax status of the organisation.
What's particularly annoying is when individuals try to minimise their taxes through various means they're often called out by the tax office, but for corporations who do exacltly the same they're actively encouraged by governments like that of NL.

By Anonymous | 15 November 2012 4:01 PM

I can only hope that the Netherlaands is making a lot of money out of this deal NL needs as much help as possible to restore the economy, increase spending power and to pay for healthcare. It is a big mistake unless NL has a hefty fee for its fiscal services.

By Disgusted in Amsterdam | 15 November 2012 8:37 PM

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