Inside Reindert Dooves’s home, a 17th- century, three-story converted
warehouse along the Zaan canal in suburban Amsterdam, a 21st-century
Internet giant is avoiding taxes.
The bookkeeper’s home office doubles as the headquarters for a Yahoo, Inc offshore unit. Through this sun-filled, white- walled room, Yahoo has taken advantage of the law to quietly funnel hundreds of millions of dollars in global profits to island subsidiaries, cutting its worldwide tax bill.
The Yahoo arrangement illustrates that the the Netherlands in the heart of a continent better known for social welfare than corporate welfare, has emerged as one of the most important tax havens for multinational companies. Now, as a deficit-strapped Europe raises retirement ages and taxes on the working class, the Netherlands’ role as a euro 9.5 ($13trillion) relay station on the global tax-avoiding network is prompting a backlash.
The Dutch Parliament has debated the fairness of its tax system this year as lawmaker from several parties, including members of the country’s governing coalition, say they want to remove a stain on the nation’s reputation.
The European Commission, the European Union’s executive body, declared a war on tax avoidance and evasion, which it said costs the EU 1 trillion euros a year. The commission advised member states -- including the Netherlands -- to create tax-haven blacklists and adopt anti-abuse rules. It also recommended reforms that could undermine the lure of the Netherlands, and hurt a spinoff industry that has mushroomed in and around Amsterdam to abet tax avoidance.
Attracted by the Netherlands’ lenient policies and extensive network of tax treaties, companies such as Yahoo,Google Inc, Merck & Co. and Dell Inc. have moved profits through the country. Using techniques with nicknames such as the “Dutch Sandwich,” multinational companies routed 10.2 trillion euros in 2010 through 14,300 Dutch “special financial units,” according to the Dutch Central Bank. Such units often only exist on paper, as is allowed by law.
Unfortunately so far, all the politicians have done is talk and more talk. The question one would ask now is do Governments really want to change their tax structures or is it all political hogwash?
EU-Digest
The bookkeeper’s home office doubles as the headquarters for a Yahoo, Inc offshore unit. Through this sun-filled, white- walled room, Yahoo has taken advantage of the law to quietly funnel hundreds of millions of dollars in global profits to island subsidiaries, cutting its worldwide tax bill.
The Yahoo arrangement illustrates that the the Netherlands in the heart of a continent better known for social welfare than corporate welfare, has emerged as one of the most important tax havens for multinational companies. Now, as a deficit-strapped Europe raises retirement ages and taxes on the working class, the Netherlands’ role as a euro 9.5 ($13trillion) relay station on the global tax-avoiding network is prompting a backlash.
The Dutch Parliament has debated the fairness of its tax system this year as lawmaker from several parties, including members of the country’s governing coalition, say they want to remove a stain on the nation’s reputation.
The European Commission, the European Union’s executive body, declared a war on tax avoidance and evasion, which it said costs the EU 1 trillion euros a year. The commission advised member states -- including the Netherlands -- to create tax-haven blacklists and adopt anti-abuse rules. It also recommended reforms that could undermine the lure of the Netherlands, and hurt a spinoff industry that has mushroomed in and around Amsterdam to abet tax avoidance.
Attracted by the Netherlands’ lenient policies and extensive network of tax treaties, companies such as Yahoo,Google Inc, Merck & Co. and Dell Inc. have moved profits through the country. Using techniques with nicknames such as the “Dutch Sandwich,” multinational companies routed 10.2 trillion euros in 2010 through 14,300 Dutch “special financial units,” according to the Dutch Central Bank. Such units often only exist on paper, as is allowed by law.
Unfortunately so far, all the politicians have done is talk and more talk. The question one would ask now is do Governments really want to change their tax structures or is it all political hogwash?
EU-Digest
