Is the Netherlands regarded as a tax haven? That depends on who you ask
The Netherlands has had the image of a tax haven for many years and it seems like we are unable to get rid of it. Maarten de Wilde, Professor of International Tax Law at Erasmus School of Law, talks to NU.nl about why the opinions on whether the Netherlands is a tax haven differ.
What qualifies a country as a tax haven?
De Wilde: “It is simply hard to determine if a country qualifies [as a tax haven], because there is no official definition.” An NGO focuses on the attractiveness of the system for companies, while the OECD looks at the transparency of the system, and other parties look at the policy efforts of the government. “In the past, the Netherlands built that reputation , but over time a lot has changed.”
Good climate for investment
The Netherlands has worked hard on an attractive investing climate for multinationals. Achieving that is not possible by just implementing lucrative tax legislation. Investing in a proper legal system and educating people bilingually is also a necessity, for example. Adjusting tax laws in favour of multinationals, occurs less and less, de Wilde points out: “This has changed a lot in the meantime, but we somehow fail to get rid of that image. The typical shell companies, without any personnel and the sole purpose of channelling profits and avoiding taxes, are almost extinct in the Netherlands.”
Migration of multinationals
A common fear is that raising the taxes will lead to the departure of multinationals, but there are also other potential effects of raising taxes: “There is always a chance businesses leave us, but companies also take the previously mentioned considerations into account. However, higher taxes will almost always have an effect, by resulting in higher market prices or lower wages.”