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The Netherlands a tax haven, a misunderstanding?
Over recent days turbulence occurred in The Netherland, as the White House issued a press release in which The Netherlands were mentioned as tax haven. The Dutch Minister of Finance appeared to be caught by surprise. And indeed, after efforts by the Dutch Embassy in Washington, the spokesman of the Minister announced that the sentence would be removed from the press release and that it had all been a misunderstanding.
Although Tax Justice Netherlands does not consider The Netherlands a tax haven as such, it is of the opinion that the Dutch system of tax treaties together with other tax regulation is regularly been abused to avoid taxes in other countries. The United States underlined this by pointing at tax avoidance caused by fiscal constructions abroad. Therefore it probably was not just a matter of a misunderstanding.
Seen the large number of “letter box companies” in the Netherlands, it is not likely that the U.S. abusively came to its conclusion that the Netherlands is one of the countries from which in 2003 nearly one-third of all foreign profits were reported by U.S. corporations.
And in fact the Minister does not deny that point. He even supports the US in its efforts to stop tax avoidance. He underlines the active role of the Netherlands to promote transparency and information exchange, but does not seem to be willing to critically review the possibilities to abuse the Dutch set of tax treaties at the expense of other countries.
But how desirable is the current situation? What are the social consequences of the praised Dutch tax treaties? Today the Americans complain, but what other countries face tax evasion as a result of the Dutch treaties? How much do developing countries miss out on tax income as a result of smart fiscal constructions that the system does not prevent?
Tax Justice Netherlands underlines that it is good for the Netherlands to have a sound set of tax treaties, but also reiterates that the possibilities of abuse of the tax regulation needs to be point of discussion. Government, politics and not in the least multinationals need to take position and consider their social responsibility. Calling this issue a misunderstanding means avoiding the underlying problems and ignoring social responsibility.
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