Sunday 27 November 2022

Tax deals through letterbox firms under fire, MPs call for change

MPs from the ruling VVD and PvdA want an end to the establishment of letterbox companies in the Netherlands, used by multinationals and rock groups like the Rolling Stones to avoid taxes

Letterbox companies are listed in the Netherlands on paper in order to profit from special Dutch tax deals. According to television programme Nieuwsuur, some €10,000bn streams through the Netherland every year via letterbox companies.
Labour MP Ed Groot told Nieuwsuur letterbox firms damage the Netherlands’ reputation and he is planning to ask junior finance minister Frans Weekers to take action.
The VVD Liberals and Socialists support this position, meaning there is a majority in parliament, the broadcaster says.
The European Commission has already complained about the Dutch tax climate and will publish new proposals to tackle tax havens in Europe later today.
A leaked version of the proposals in April showed the plan could lead to the closure of 20,000 letterbox companies in the Netherlands, costing the treasury €1.5bn, the AD reported at the time.
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
The letterbox system allows multinationals and bands like U2 to cut hundreds of millions of euros from their tax bills.
The issue hit the headlines again in the past few days after it emerged US coffee giant Starbucks has paid just £8.6m tax in Britain after 14 years of trading.
British MPs are angry Starbucks UK pays a 4.7% fee to the coffee giant’s Dutch arm for the right to use its branding and coffee recipe. The fee, which the paper says has been as high as 6%, reduces its UK tax bill.
Earlier stories
Starbucks under fire in Britain over Dutch tax deal
EU wants an end to letterbox companies
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

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