EU wants an end to letterbox firms, plan could cost Holland €1.5bn

Measures to reduce tax evasion backed by the European parliament on Thursday could lead to the closure of 20,000 letterbox companies in the Netherlands, costing the treasury €1.5bn, the AD reports on Friday.

The proposals, which say ‘tax systems should be made more effective and efficient and backed by better collection and more intensive efforts to combat tax fraud and evasion,’ will now be translated into new Commission directives by June, the paper says.
Thousands of companies are located in the Netherlands on paper because of the generous tax regime for foreign participations. They range from multinational giants such as Google to bands like U2 and the Rolling Stones.
Dutch Socialist MEP Dennis de Jong, one of the five initiators of the proposals, told the AD EU countries are missing out on €1,000bn a year in lost taxes through letterbox firms.
For example, 17 of Portugal’s 20 biggest listed companies are actually based in the Netherlands on paper, he said.
Earlier this year, it emerged letterbox companies in the Netherlands are largely exempt from extra demands which the government introduced several years ago following pressure from Brussels.
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.
However, research by the Financieele Dagblad showed these rules only apply to companies which the government considers to be a ‘service providing entity’. This covers companies set up, for example, to pay interest and royalties.
Earlier articles
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

Thank you for donating to

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