48.7 F
New York
Thursday, March 28, 2024

Netherlands Wants to Drop Rep as Tax Haven for US Companies

Related Articles

-Advertisement-

Must read

The Netherlands has long been associated with being a tax haven but want to shake off that reputation. Menno Snel, a top financial official, knows that tax planning has become an area of advanced knowledge for many Dutch people.

One indicator of this problem is that money flows over the border. The New York Times explains that “for tax avoidance purposes, the Netherlands offers the status of a European country, while allowing big multinationals, like Google and Ikea, to move global profits through Dutch subsidiaries, drastically lowering their tax payments.”

Despite the long running image of being a tax haven, the Finance Ministry this week submitted proposals to Parliament aimed at stopping corporations from being able to park money in the country as a means of avoiding taxation back at home. The idea will still be debated on for another few months, with debate planned to end when the year finishes.

Based off of some of the plans floated around, the Netherlands could possibly use levies on profits going into these tax havens and closing a loophole that will prevent companies from gaming the system twice. Actually forcing the change that’s being sought could be more difficult than it sounds though thanks to a number of opposition groups, interested parties, and lawyers and accountants who can still find loopholes.

Snel, state secretary of finance, said in an interview to The New York Times, “we must be fair in recognizing that some companies are misusing the open tax system that the Netherlands has.”

The Netherlands has had a portion of its electorate grow angry and weary of what they perceive to be big corporations stretching across the globe and sucking the life out of the local economies, not too different from the United States. Not only is there this added pressure to do something about the mostly American corporations stashing money in the Netherlands, but the country must act by 2019 to be in compliance with new European Union rules that come into place starting next year.

United States tax cuts also inadvertently affect the Netherlands because it will now be more difficult and more disincentivized to put money overseas as a big multinational corporation operating out of America.

Large amounts of money coming into the country “suggest that the country’s tax rules are used by companies that engage in A.T.P.,” the European Commission said this year as he spoke about aggressive tax planning.

Nike, one of the companies criticized for storing money overseas in tax havens like in the Netherlands through the creation of shell companies and subsidiaries, commented amidst the news. “Nike fully complies with tax regulations, and we rigorously ensure our tax filings are fully aligned with how we run our business,” the company said in a statement to The New York Times.

By: Karin Proll

balance of natureDonate

Latest article

- Advertisement -