Kavelaars: The Netherlands does not belong on the black list of tax havens

Peter Kavelaars, Professor of Fiscal Economics at Erasmus School of Economics

In BNR Nieuwsradio Peter Kavelaars, Professor of Fiscal Economics at Erasmus School of Economics, comments on the news that according to Oxfam Novib the European blacklist of tax havens is in danger of losing its credibility. Oxfam Novib finds it unacceptable that certain EU countries are not on the list, while they could be considered as tax havens. According to Kavelaars there is no risk that the list loses its credibility, but he agrees with Oxfam Novib concerning the criteria that make a country a tax haven.

‘The criteria are a bit difficult and are interpreted differently. Oxfam Novib, for example, does this very strict and the EU less strictly. Furthermore, the Netherlands also has its own criteria and the OCD has some other criteria as well. This ensures that there are several black and grey lists worldwide.’ According to Kavelaars it would be best if one list is used worldwide, and the ‘most obvious one would be that of the OCD.’

The next point, according to Kavelaars, is the question whether preferential regimes (regimes that offer certain fiscal facilities) should all be banned. This is the way Oxfam Novib wants to proceed. Another viewpoint might be that it should be possible that certain tax facilities support a certain level of investment. ‘I think the latter would be preferable, as tax competition between countries is a good economic element in itself.’

According to Oxfam Novib, the Netherlands, the US and Switzerland should also be on this blacklist. Kavelaars does not share this view. ‘In the Netherlands a god example would be the innovation box, where profits are taxed at 7%. On the one hand this seem crazy, as it would normally be taxed around 20 or 2 percent. However, this also does generate investments and employment. In addition, the Netherlands is working hard to put measures in place against the well-known letterboxes, but I takes some time before such measures are effective.’