Multinational companies that register a headquarters operation in the Netherlands can receive very substantial discounts – up to 80% – on their corporate tax bills, according to an investigation by NRC published on Wednesday.
There is a range of options for non-Dutch firms to negotiate an ‘effective tax percentage’ that they will have to pay to the Dutch tax office, the paper said.
This was revealed in documents related to the Israeli chemicals company ICL. Parliament is due to debate the issue of how ICL was attracted to the Netherlands on Wednesday evening. NRC has been running a series of articles about prime minister Mark Rutte’s involvement in the matter.
The Netherlands Foreign Investment Agency (NFIA), a unit of the economic affairs ministry, had contact with ICL beginning in 2011 and outlined the wide possibilities for multinationals to negotiate with the tax office and to ultimately reduce the tax rate to only 5%.
There is no mention of these deals in a letter sent to parliament by caretaker economic affairs minister Henk Kamp and caretaker junior tax minister Eric Wiebes on Friday.
In fact the letter stated these deals were ‘never negotiated’. A spokesman said the tax rate and tax basis are the same for every company.
But details of the sweetheart tax deals were included in emails from NFIA to the Israeli office of accountancy firm EY (formerly Ernst & Young) which was helping ICL to settle on a European head office in Amsterdam between 2011 and 2015.
The NRC said the Netherlands had won out over Switzerland as the location for the ICL headquarters by offering a better tax deal, claiming ICL will pay about 10% in corporate tax for the next ten years instead of the standard 25% rate.