When is a tax haven not a tax haven?
Has the US really relented about the Netherlands’ status as a tax haven? asks Robin Pascoe.
Well that was easy, wasn’t it? The US publishes a document which lumps the Netherlands together with evil Ireland and bad Bermuda as a place where American firms like to register themselves and after one protest from the Dutch ambassador the list is amended?
Is the US so very easily pressured by a little country on the other side of the Atlantic? More than that, did Obama’s researchers really get it wrong?
The Dutch papers have been full of claims that Obama specifically mentioned the Netherlands, which he did not.
The claim was made in a supporting document issued to coincide with Obama’s speech. It said: ‘Nearly one-third of all foreign profits reported by U.S. corporations in 2003 came from just three small, low-tax countries: Bermuda, the Netherlands and Ireland.’
No-one, it seems, is actually disputing that fact.
But the very inclusion of Holland in a support document about all the billions of dollars which US companies manage to keep out of the American taxman’s clutches was enough to make Dutch officials very cross indeed. But what they are angry about is the claim that the Netherlands is a low tax country.
In those terms, of course, they are right. A 52% top rate on personal income is in no way low tax. And while our corporation taxes have been cut, they are still not exactly zero at 25.5%.
So why do so many foreign firms set up in business here? After all, we should not forget that the US energy giant Enron which came to such an ignominious end had dozens of different companies registered in the Netherlands. As did dodgy Italian dairy group Parmalat.
The Netherlands actively encourages foreign firms to set up operations here by promoting tax breaks to newcomers. There are lots of loopholes waiting to be exploited. There is no tax on royalities – which is why the Rolling Stones and U2 set up shop. The advanced tax ruling set-up is generous and allows companies to practically agree their tax bill before arrival.
As the Netherlands foreign investment agency states on its own website: ‘While corporate tax rates are in line with the country’s European neighbours, there are numerous features that serve as an inducement to foreign companies to locate their operations in the Netherlands. In comparison with other (EU) countries, the Netherlands is known for its very competitive tax climate.’
Are we promoting ourselves as a country where you can minimise your tax bill or not? Nuff said.
Robin Pascoe is a founder of DutchNews.nl
Thank you for donating to DutchNews.nl.
We could not provide the Dutch News service, and keep it free of charge, without the generous support of our readers. Your donations allow us to report on issues you tell us matter, and provide you with a summary of the most important Dutch news each day.Make a donation