Netherlands ready to tighten tax treatment for multinationals

The government of Liberal Mark Rutte presented Tuesday its plan to tax the profits of large groups which had not been taxed until now.

Fourth in the world ranking of tax havens for large companies, with a government mocked for being that of “multinationals” , the Netherlands have decided to correct their image. The coalition government led by the very liberal Mark Rutte has planned to announce Tuesday, September 17, on the occasion of the reopening of parliament, a day of national festivities marked by the speech from the throne, a project which aims to tax the profits of large groups that have so far escaped tax, even though their headquarters are in the kingdom.

It was revelations about the over-favorable treatment of oil and gas giant Shell that set the fire powder, in November 2018. They indicated that the Anglo-Dutch group, based in The Hague, did not pay taxes while making significant profits there – 1.3 billion euros in 2017.

On the basis of internal documents from the Ministry of Finance, we learned that Shell could accumulate the losses of its subsidiaries and deduct them, like its investments abroad, from its profits in the Netherlands. Its taxes had, as a result, been reduced to almost nil over the past decade. The measure had the appearance of a real state secret, with an administration required to respect absolute silence.

Previously, Mr. Rutte had already been put on the spot for having defended a plan to abolish the tax on dividends that corporations pay to their shareholders. A measure that would have allowed Shell to save 7 billion. Media had revealed, in the summer of 2018, that large companies like Shell but also the electronics group Philips, the chemist AkzoNobel and the food and cosmetics giant Unilever had pushed for the removal of the tax of 15% in force until then.

Respond to criticism

This was starting to do a lot for a country which is, moreover, in the sights of the European Commission for the thousands of rescripts tax that it granted to companies to attract them to its territory. The case of Ikea, which organized, via the Netherlands, transfers of profits to places where they are not taxed has become emblematic and justifies, according to the international network Tax Justice and the NGO OxfamNovib, fourth place of the country in the world ranking of 64 tax havens, behind the Virgin Islands, Bermuda and the Cayman Islands. In front of Switzerland, Luxembourg and Ireland.