Social Europe

politics, economy and employment & labour

  • Themes
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

What Europe Needs To Know About The Dutch Tax Haven

David Hollanders 5th January 2016

David Hollanders

David Hollanders

As of this January 1, the Netherlands holds the Presidency of the European Union. This is a good occasion to put the spotlight on a well-kept Dutch secret: The Netherlands is one of the largest tax havens in Europe, indeed the world.

While minister of finance Jeroen Dijsselbloem – better known as head of the Euro Group – routinely denounces Greece’s “unwillingness” to reform its tax system, the Canadian mining company Gold Eldorado avoids paying taxes in Greece via his own country. While the Netherlands lambasted Cypriot banks in 2013 for laundering (Russian) money, oligarchs were invited in 2013 and 2014 to the Dutch embassy in Ukraine for a seminar by private Dutch law firms on how to avoid taxes via the Netherlands. Recently the European Commission decided that special Dutch tax breaks for Starbucks are illegal under European state aid rules.

These are not isolated events. An important pillar of the Dutch financial-political complex is to attract foreign capital with a rich menu of tax-breaks and subsidies. The Netherlands has tax agreements with many countries. In particular, incoming royalties are untaxed. Corporations pay fabricated royalty costs to tax shelter companies, artificially lowering their profits. Any royalties are virtually untaxed and – when returning to the parent company – are untaxed in the home country because they have already been taxed (albeit at a zero rate). Vice versa, profits from (formally) foreign subsidiaries are untaxed when returning to Dutch headquarters.

It is relatively easy to found a shelter company in the Netherlands. All you need is a mailbox. (The Rolling Stones and U2 have offices at the Herengracht in Amsterdam, although they are never seen there.) Tax shelter companies are also convenient for regulatory arbitrage. Many special vehicle purposes of Lehman Brothers could be traced back to the Netherlands.

Large companies can furthermore collect subsidies for all kinds of activities that are (or should be) part of everyday operations. Innovation is subsidized and there are 75 different subsidies for companies which give jobs to the unemployed. Taxes can be further reduced by subtracting interest rate payments (as is practice in many countries).

Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content.


We will never send you spam and you can unsubscribe anytime.

Thank you!

Please check your inbox and click on the link in the confirmation email to complete your newsletter subscription.

.

If there is still some tax to pay, companies (at least multinationals like Starbucks) can negotiate special tax agreements with the ministry of finance. These so-called tax rulings are not disclosed, not even to Members of Parliament. That didn’t stop an historic coalition of social democrats and the radical right PVV from submitting a bill in 2013 (passed with the help of the right-wing liberal party VVD), which stated that the Netherlands was not a tax haven and which called on the government to discourage use of the term.

To be clear, the Netherlands is a textbook example of a tax haven. There are 12,000 mailbox companies channelling €4bn (a world record). Eighty of the 100 largest companies worldwide have a Dutch mailbox company; 48 percent of Fortune 500 companies have a shell company in the Netherlands. Nineteen of the twenty largest listed Portuguese firms dodge taxes via the Netherlands. Greece loses millions every year via tax dodging through the Netherlands.

In 2009 US President Obama called the Netherlands (as well as Ireland) a tax haven. The IMF agrees, stating that the Netherlands has “special legislation that provides advantages to multinational corporations using these countries as pass-throughs”. That is what Europe needs to know next time a Dutch minister pleads for decimating Greek pensions or increasing Portuguese VAT.

David Hollanders

David Hollanders lectures economics and finance at Tilburg University.

Home ・ Politics ・ What Europe Needs To Know About The Dutch Tax Haven

Most Popular Posts

schools,Sweden,Swedish,voucher,choice Sweden’s schools: Milton Friedman’s wet dreamLisa Pelling
world order,Russia,China,Europe,United States,US The coming world orderMarc Saxer
south working,remote work ‘South working’: the future of remote workAntonio Aloisi and Luisa Corazza
Russia,Putin,assets,oligarchs Seizing the assets of Russian oligarchsBranko Milanovic
Russians,support,war,Ukraine Why do Russians support the war against Ukraine?Svetlana Erpyleva

Most Recent Posts

trade,values,Russia,Ukraine,globalisation Peace and trade—a new perspectiveGustav Horn
biodiversity,COP15,China,climate COP15: negotiations must come out of the shadowsSandrine Maljean-Dubois
reproductive rights,abortion,hungary,eastern europe,united states,us,poland The uneven battlefield of reproductive rightsAndrea Pető
LNG,EIB,liquefied natural gas,European Investment Bank Ukraine is no reason to invest in gasXavier Sol
schools,Sweden,Swedish,voucher,choice Sweden’s schools: Milton Friedman’s wet dreamLisa Pelling

Other Social Europe Publications

The transatlantic relationship
Women and the coronavirus crisis
RE No. 12: Why No Economic Democracy in Sweden?
US election 2020
Corporate taxation in a globalised era

Hans Böckler Stiftung Advertisement

Towards a new Minimum Wage Policy in Germany and Europe: WSI minimum wage report 2022

The past year has seen a much higher political profile for the issue of minimum wages, not only in Germany, which has seen fresh initiatives to tackle low pay, but also in those many other countries in Europe that have embarked on substantial and sustained increases in statutory minimum wages. One key benchmark in determining what should count as an adequate minimum wage is the threshold of 60 per cent of the median wage, a ratio that has also played a role in the European Commission's proposals for an EU-level policy on minimum wages. This year's WSI Minimum Wage Report highlights the feasibility of achieving minimum wages that meet this criterion, given the political will. And with an increase to 12 euro per hour planned for autumn 2022, Germany might now find itself promoted from laggard to minimum-wage trailblazer.


FREE DOWNLOAD

ETUI advertisement

Bilan social / Social policy in the EU: state of play 2021 and perspectives

The new edition of the Bilan social 2021, co-produced by the European Social Observatory (OSE) and the European Trade Union Institute (ETUI), reveals that while EU social policy-making took a blow in 2020, 2021 was guided by the re-emerging social aspirations of the European Commission and the launch of several important initiatives. Against the background of Covid-19, climate change and the debate on the future of Europe, the French presidency of the Council of the EU and the von der Leyen commission must now be closely scrutinised by EU citizens and social stakeholders.


AVAILABLE HERE

Eurofound advertisement

Living and working in Europe 2021

The Covid-19 pandemic continued to be a defining force in 2021, and Eurofound continued its work of examining and recording the many and diverse impacts across the EU. Living and working in Europe 2021 provides a snapshot of the changes to employment, work and living conditions in Europe. It also summarises the agency’s findings on issues such as gender equality in employment, wealth inequality and labour shortages. These will have a significant bearing on recovery from the pandemic, resilience in the face of the war in Ukraine and a successful transition to a green and digital future.


AVAILABLE HERE

Foundation for European Progressive Studies Advertisement

EU Care Atlas: a new interactive data map showing how care deficits affect the gender earnings gap in the EU

Browse through the EU Care Atlas, a new interactive data map to help uncover what the statistics are often hiding: how care deficits directly feed into the gender earnings gap.

While attention is often focused on the gender pay gap (13%), the EU Care Atlas brings to light the more worrisome and complex picture of women’s economic inequalities. The pay gap is just one of three main elements that explain the overall earnings gap, which is estimated at 36.7%. The EU Care Atlas illustrates the urgent need to look beyond the pay gap and understand the interplay between the overall earnings gap and care imbalances.


BROWSE THROUGH THE MAP

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us on social media

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube