Multinationals, and French state companies, use Dutch tax deals (update)

The biggest 100 multinationals in the world pushed at least €57bn through the Netherlands using Dutch tax deals in 2011, the Volkskrant reports on Wednesday.

Google, IBM and Italian oil and gas group ENI head the list of companies using letter box companies and advance rulings to cut their Dutch tax bills to between 0 and 5%, the Volkskrant says.

According to the Financieele Dagblad on Wednesday, French state companies are among those using the Netherlands to cut their tax bills.

Energy firms EDF and GDF Suez, defence giant Thales and water firm Veolia are among those which have recently set up financial holding companies in the Netherlands, the paper says. The French state has a considerable shareholding in all four companies.

EDF, for example, has three Dutch holding companies which ‘own’ its interests in two Polish power stations. The Netherlands does not charge the  French firm any tax on its Polish dividends, which in France would be taxed at 5%.

Starbucks

The letterbox system allows multinationals and bands like U2 to cut hundreds of millions of euros from their tax bills.

The issue hit the headlines last November when it emerged US coffee giant Starbucks has paid just £8.6m tax in Britain after 14 years of trading.

British MPs are angry Starbucks UK pays a 4.7% fee to the coffee giant’s Dutch arm for the right to use its branding and coffee recipe. The fee reduces its UK tax bill.

Minister

Junior finance minister Frans Weekers told parliament on Wednesday the Netherlands is not a tax haven. While multinationals do locate in the Netherlands to reduce taxes, they still pay corporate taxes over their profits in the Netherlands, he said.

Nevertheless, multinationals are welcome as long as they are more than a simple letterbox and carry out real activities and create real jobs, the Volkskrant quoted Weekers as saying.

Earlier stories
Tax deals for letter box firms under fire, MPs demand change
Starbucks under fire in Britain over Dutch tax deal
EU wants an end to letterbox companies
Letterbox companies largely exempt from tougher rules
The Netherlands is a popular tax haven for FTSE 100 firms
Holland no longer a US tax haven
More tax levied over tax haven income

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