A new tax law should tackle the multinationals, who now barely pay income tax. In the podcast De Dag on NPO Radio 1 Peter Kavelaars, Professor of Economics of Taxation at Erasmus School of Economics, speaks about this new law and its consequences.
In the current situation multinationals are allowed to deduct foreign losses from their profit in the Netherlands. A regulation that makes the Netherlands a very attractive place for your headquarter. But why would the baker on the corner pay income tax and can the big multinational get away with it?
A change in the regulation should put an end to this. Multinationals are no longer allowed to deduct foreign losses from their profit, which brings the treasury several hundred million euros.
According to Kavelaars there is no way to circumvent the law in the current proposal. The only option he could think of is finding a subsidiary in another country where you are still allowed to deduct your losses. Nevertheless the fiscal profits will increase in the Netherlands.
Moving your headquarters to another country is no threat either, because it would cost way more than just paying the tax.
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Listen to the entire podcast on NPO Radio 1, 12 September 2019 (in Dutch).