The Netherlands is a hub in global tax avoidance

That’s what the Tax Justice Network, a London-based NGO that promotes fair taxes, says in a report to be published on Tuesday. The previous report two years ago concerned the loss of $19.4 billion in tax revenue that the Netherlands generates in other countries. That was then 6.3 percent of the total. The value of 51 billion Dutch dollars (46 billion euros) represents 17 percent of the tax losses incurred globally.

According to Tax Justice, which is based on OECD figures, governments around the world lose $472 billion in taxes due to tax havens. It relates to $301 billion in corporate tax avoidance – a sixth of which is across the Netherlands – and $171 billion in tax evasion through tax havens by wealthy individuals. Four countries are responsible for more than half of said corporate tax evasion, according to the Tax Justice report: Luxembourg, Switzerland, the United Kingdom, and the Netherlands.

tax haven

Marnix van Rijk, the outgoing Secretary of State for the CDA (who will not return in the new Cabinet) stated emphatically when he took office that the Netherlands is not a tax haven. Tax justice sees it differently. “We consider countries that facilitate tax evasion as tax havens, regardless of where the loss of tax revenue is deposited. The Netherlands does so on a large scale,” says Arnold Merckes of Tax Justice Netherlands. After all, companies set up facilities across the Netherlands in order to pay no or much less taxes in other countries. Constructions and massive flow are still there.

Last June, Van Rij stated that tax evasion across the Netherlands had decreased significantly due to various measures, from 38.5 to 6 billion euros. But according to experts, many countries are erroneously excluded from this figure. The Netherlands also still has many letterbox companies. Merckes: Yes, we call the Netherlands a tax haven. Not for the common man, but for multinational companies who can set up tax facilities across the Netherlands.

Tax law professor Jan Vliegert (Leiden University) agrees that there is still much to be done against tax evasion, but points out that Tax Justice uses OECD figures for 2018 – according to the NGO, there is no suitable more recent data. It is possible, but it is difficult to assert that no steps have been taken in recent years. This is very easy,” says Phlegert. In Europe, for example, a minimum profit tax rate of 15 percent is being worked out for large companies, which was previously unimaginable. Which does not change the fact that the Netherlands is indeed still an important country.