Multinationals avoid tax on €22bn in royalties and interest: report

Multinationals moved some €22bn in royalties and interest through the Netherlands in 2016 in order to avoid tax, according to a new report for the finance ministry.

This is around 10% of the total royalty, dividend and interest income pushed through the Netherlands via shell companies, the report, by Amsterdam research bureau SEO, said. Most of the money goes to countries with ‘normal’ tax rates such as Britain and the US, the research showed.

The cabinet is planning to introduce a tax on royalties and interest – the measure was included in the coalition agreement – and that will put a stop to such large movements of money, tax minister Menno Snel told MPs.

The new measure is due to come into effect in 2021.

‘Companies which really add something to our economy are welcome in the Netherlands,’ Snel said. ‘But they should not use our country to move money to tax havens. The tax on interest and royalties will help tackle this.’