Monday 17 January 2022

Fortune 500 firms love the Netherlands and its tax regime

There is no country in the world where so much American money is moved through for tax purposes as the Netherlands, the Volkskrant reports on Tuesday, quoting research by two American NGOs.

In total, the 500 biggest American companies – the Fortune 500 – moved $127bn through the Netherlands in 2010, and that is far more than in Bermuda ($94bn) or the Cayman islands ($51bn), the Volkskrant says.

 

In total, 48% of the Fortune 500 companies have one or more limited companies in the Netherlands. Second is Singapore with 42% and third Hong Kong with 40%.

 

Tax avoidance

 

The research comes from two American organisations: Citizens for Tax Justice (CTJ) and the Public Interest Research Group PIRG. Their report, The Offshore Shell Games, says that offshoring allows American companies to avoid paying some $90bn in tax every year.

 

The Dutch finance ministry told the Volkskrant that many US firms are not only in the Netherlands for tax purposes. They also have production operations, headquarters and distribution centres which create thousands of jobs.

 

However, the Volkskrant says, that only explains a small proportion of the €127bn mentioned in the report. Other research has shown that Dutch letter box companies have ‘turnover’ of some €12 trillion a year – which is 20 times gross national product.

 

British firms

 

 

Last year, British institute Action Aid carried out similar research. It found that the US state of Delaware was the most popular place for the FTS 100 companies to be based, followed by the Netherlands. FTSE 100 firms had around 1,200 limited companies in the Netherlands.

 

The Netherlands is popular with multinationals because of the willingness of the tax authorities to agree tax arrangements in advance. The Netherlands also does not tax royalties.

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