Ex-minister defends Swiss bank rent payments

8th February 2009, Comments 0 comments

In an interview with Radio Netherlands Worldwide, former Dutch foreign affairs minister Ben Bot has defended the practice of paying rent for diplomats' residences in some developing countries via bank accounts in Switzerland, Luxemburg or Bermuda.

THE NETHERLANDS - Dutch newspaper NRC Handelsblad previously reported that it amounted to the ministry cooperating with tax evasion.

However, Mr Bot denies this, pointing out that the owner of the property is responsible for declaring income to the tax authorities, not the Dutch foreign ministry.

Mr Bot said it was understandable that property-owners in countries with high inflation rates should wish to receive rent payments in hard currencies such as the dollar or euro. Often it is impossible to make payments in such currencies into local bank accounts.

Conservative VVD MP Arend-Jan Boekestijn has condemned such agreements between tenants and landlords in so-called side letters, whereby a large portion of the rent is deposited in a bank account in a third country.

Mr Boekestijn claims payments are undoubtedly made which remain undeclared to the tax authorities. He says the practice is particularly undesirable given that the Netherlands urges the developing countries themselves to eradicate corruption.

The practice of making payments via tax havens is now gradually being discontinued.

Mr Bot, who was foreign minister from 2003 to 2007, says it is necessary in some Asian and African countries in order to secure decent living accommodation.

Radio Netherlands/ Expatica

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