New tax minister Menno Snel has given the order for 4,000 advance tax rulings made between the Netherlands and foreign firms to be re-examined, following the news that one major deal with Procter & Gamble did not meet the regulations.
On Tuesday, Trouw reported that an agreement with P&G, which allowed the company to shift $676m untaxed to the Cayman Islands, had been signed off by a single tax inspector in Rotterdam, in contravention of the rules.
Snel told MPs in a briefing on Wednesday that the P&G deal is ‘unacceptable’ and that he has instructed senior officials to make sure the rules are adhered to from now on. The results of the probe into existing deals dating from 2012 will be published early next year.
Tuesday’s new claims about tax avoidance resulting from the Paradise Papers were also raised at Tuesday’s meeting of finance ministers in Brussels, the first to be attended by new finance minister Wopke Hoekstra.
According to the Financieele Dagblad, Europe’s tax commissioner Pierre Moscovici asked Hoekstra to immediately suspend the use of the corporate construction which has allowed Nike to slash its tax bill. EU legislation will phase out the use of CVs, or limited partnerships, in 2020, but there is no reason not to take action now, Moscovici is quoted as saying.
The FD said Hoekstra had made it clear that the Netherlands ‘has changed course’. ‘I explicitly said that the Netherlands wants to be part of the solution,’ the paper quotes the new minister as saying.
EU ministers plan to publish a blacklist of countries which facilitate tax avoidance in December.
Trouw said the latest revelations had led to a heated debate in Germany about the Netherlands, with journalists wondering what the country actually has to gain by its liberal attitude to tax deals.