Wednesday 23 June 2021

Dutch support G7 tax haven plan, and will press for EU adoption


The Netherlands supports the G7’s new proposals for tackling tax avoidance which, according to junior finance minister Hans Vijlbrief are in line with many measures that the Netherlands has recently taken.

The landmark deal, agreed on Saturday, aims to reduce the incentives for large companies to move their profits to tax havens and ensure they pay more tax. The G7 countries also agreed to back a minimum global corporate tax rate of at least 15%.

US treasury secretary Janet Yellen said after the London meeting that the agreement was an ‘unprecedented commitment’ which would end the race to the bottom on global taxation.

The deal focuses on the ‘largest and most profitable multinational enterprises’, primarily assumed to be tech giants such as Facebook and Google, which operate around the globe and use a complicated network of subsidiaries to reduce their taxes.

The Netherlands has long been considered an important location for tax evasion. In March international NGO Tax Justice Network published a report stating only the British Virgin islands, the Cayman Islands and Bermuda play a greater role helping multinational corporations pay less tax than they are expected to.

In particular, gaps in Dutch legislation which allowed interest, royalties and dividends to be transferred elsewhere, and the way multinationals can offset losses booked in another jurisdiction, are behind the Netherlands high position on the list, the report said.

And last month, Australia based tax research institute Cictar published another report which showed taxi and meal delivery giant Uber shifted $5.8bn through 50 or so shell companies in the Netherlands in 2019 after creating a massive tax shelter.

The finance ministry, however, claims the outgoing cabinet has made major advances in eliminating tax evasion, and points to new rules covering interest and royalties and more changes that are being made in 2024.

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