Letterbox companies in the Netherlands are largely exempt from extra demands which the government introduced several years ago following pressure from Brussels, the Financieele Dagblad reports on Wednesday.

Thousands of international companies have set up Dutch operations to process their internal cash flow and benefit from generous tax breaks, but the government was forced to impose new conditions on these Dutch units at the beginning of this century.
Companies must now carry out book-keeping in the Netherlands, half the management must be resident locally and the operation must have appropriate financial resources, the paper says.
Royalties
However, research by the FD shows these rules only apply to companies which the government considers to be a ‘service providing entity’, abbreviated to dvl. This covers companies set up, for example, to pay interest and royalties.
But holding companies which hold stakes in other firms and stream dividends are not covered by the tougher rules, the paper says.
In addition, the new rules only apply to dvls which have agreed a tax ruling with the government.
Surprise
Some 20,000 letterbox companies are currently registered in the Netherlands and between 5,000 and 10,000 are likely to be service providing entities, the paper says. The Rolling Stones and U2 are both based in the Netherlands, for example.
Labour MP Ed Groot told the paper he was surprised the rules do not apply to so many firms. ‘[Junior finance minister Frans] Weekers has always said the Netherlands will easily allow letterbox firms to set up here but that they have to have enough substance. He never said this only applies to service providers with a tax agreement.’
Groot has asked the minister for an explanation and plans to call for the rules to be tightened up.
Earlier articles
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