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French research: ‘The Netherlands belongs on the official list of tax havens’ | Economy

In the recent past, the Netherlands has been able to attract more investment from multinationals and other companies than real tax havens. This is apparent from new calculations by the renowned French university of Paris-Dauphine.




In recent years, an average of $7.866 billion a year has flowed through our country in foreign direct investment. That is almost five times as much as the total size of the Dutch economy. “It is even more in absolute numbers than in recognized tax havens,” says French economist Anne-Laure Delatte.

Worldwide, no less than 11.43 percent of all direct foreign investments went to the Netherlands and 11.73 percent came from the Netherlands. This adds up to almost a quarter of the total: “The amount of investment that went through the Netherlands was excessively high,” concludes economist Delatte.

Econome Delatte cannot quantify exactly how much of the $7.866 billion per year passes through the Netherlands purely because of the favorable tax rates. However, she suspects that most of the money is involved. “You may wonder why the Netherlands is not yet on the official list of tax havens.”

Mapping capital flows

Delatte is part of a group of French economists who track and map global capital flows. They have already published research on Luxembourg as a tax haven. At the request of this newspaper, Delatte studied the Dutch economy and the so-called Foreign Direct Investments (FDIs) – foreign direct investments – through which companies are set up or taken over in the Netherlands.

The figures of the French survey run from 2009 to 2017. Under pressure from Brussels, among others, the Netherlands has since taken various measures to make it ‘more difficult’ for multinationals and to tackle the many letterbox companies in the Zuidas. Certain tax benefits have been canceled, for example, and the tax authorities’ investigative capacity has also been expanded.

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A demonstration against the very favorable tax climate in the Netherlands in June 2017 in The Hague in front of the House of Representatives building. Right SP parliamentarian Sadet Karabulut who came to take stock and supported the action. © MARTIJN BEEKMAN

Tax avoidance curbed

Yet enormous international flows of money continue to flow through our country. In the latest tax havens ranking by Tax Reform Justice from last March, our country is in fourth place. Only the British Virgin Islands, the Cayman Islands and Bermuda rank higher.

The figures for the Netherlands arrive at a sensitive time. Countries worldwide are about to make agreements about multinationals that avoid tax by settling in tax-efficient countries. US President Joe Biden wants to impose a “global minimum tax” of 15 percent on these companies.

Pressure increased

All in all, the Netherlands is finding it increasingly difficult to maintain its position as a fiscally favorable country. The thumbscrews have been tightened since 2009: at that time our country was placed on a list of tax havens by former president Barack Obama, including Bermuda, the Cayman Islands and Ireland.

The then Minister of Finance Wouter Bos and State Secretary Jan Kees de Jager reacted ‘not amused’ and called that seriously unjustified.

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The Netherlands as a tax haven
The Netherlands as a tax haven © Mark Reijntjens

Piketty

In the years that followed, cabinets and the House of Representatives continued to insist that the Netherlands is not a tax haven. Nevertheless, international pressure is increasing, both from Brussels and EU countries and internationally. The international bestseller ‘Capital in the 21st Century’ by French economist Thomas Piketty from 2013 also focuses on the way capital is kept out of sight of governments by the super-rich and multinationals through tax havens.

GroenLinks party leader Jesse Klaver then brought Piketty to the Netherlands for a hearing in the House of Representatives.

French research: ‘The Netherlands belongs on the official list of tax havens’ | Economy
Source link French research: ‘The Netherlands belongs on the official list of tax havens’ | Economy

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