Dutch polish tax image, to 'update' treaties with 23 poor countries

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The Netherlands is to update its tax treaties with 23 poor countries to include provisions to stop the system being abused, foreign trade minister Lilian Ploumen and junior tax minister Frans Weekers announced on Friday.

The move follows several reports showing that developing countries are missing out of millions of euros in tax income because of tax avoidance treaties with the Netherlands.

For example, a report in June by multinational research institute Sono said ‘28 [poor] countries together lose €771m on dividend and interest tax income alone every year,' because of Dutch tax treaties.

The Netherlands has tax treaties with 90 countries. 'By making use of loopholes in tax treaties... companies can avoid paying tax,' the ministerial briefing said. 'This means poor countries miss out on tax revenue, funds they clearly need to pay for instrastructure and education.'


Weekers said the Netherlands alone cannot stop this happening and the issue needs to be tackled at a global level, following consultations with the OECD, G20 and EU.

In particular, the Netherlands plans to renegotiate a treaty with Zambia, which dates from 1977 and is 'outdated', the briefing said.

The most significant measure planned by the cabinet is to ensure letter box companies are more substantive and transparent, the Financieele Dagblad said.

They will need to have their own assets, a bank account, an accountant and the majority of the management board should live in the Netherlands. The company must also carry out actual economic activity.

The cabinet hopes these measures will head off criticism about shell companies locating in the Netherlands purely to take advantage of tax treaties.

© DutchNews.nl

3 Comments To This Article

  • Dylan posted:

    on 3rd September 2013, 08:42:30 - Reply

    My colleagues from HK and Singapore will HAPPILY take over all the wealth management business currently 'held under management' in the Netherlands.
    You see, we in Asia-pacific, don't overregulate. We -understand- small businesses, we create a pro- business climate with income taxes no higher thand 17percent. We abolished Inheritance tax, and wealth tax.
    The 'free west' is not half as free as today's 'communist china', let alone SE Asia. A wonder no western citizens stand up to their governments, I 'll tell you that.
  • Bruce posted:

    on 2nd September 2013, 09:49:43 - Reply

    Just doing what they have been told by their masters in Brussels.
  • blahdeblah posted:

    on 2nd September 2013, 07:54:01 - Reply

    Sounds like another brilliant idea that will send more business away from NL, thereby ensuring that the government has even less money to hand out. Did someone ever think to tell these clowns that you don't attract businesses and investment by increasing regulations and rules in a country that already suffers from way. way too much bureaucracy? I'm sure that other countries will pick up the slack, and that business that used to go to NL will simply go there... if they simply don't go around the rules by setting up a new construct. [Edited by moderator]