Dutch Lawmakers Push For Tighter Tax Avoidance Measures

Trust Bloomberg Tax's Premier International Tax offering for the news and guidance to navigate the complex tax treaty networks and business regulations.

By Linda A. Thompson

Dutch lawmakers have called on the government to develop tougher legislation to combat tax avoidance with greater transparency and oversight of tax rulings granted and exchanged among tax authorities.

Five separate motions—including a call to clamp down on tax avoidance by letterbox companies—submitted by a handful of Finance Committee members, were approved Jan. 24 by a majority of the Dutch House of Representatives.

The politicians also urged the government to develop proposals to combat tax base erosion and profit shifting, as well as to enhance transparency on tax rulings.

One motion called on Deputy Finance Minister Eric Wiebes to combat tax avoidance by letterbox companies by ensuring corporate taxpayers have real economic activities in the Netherlands through the introduction of substance criteria.

The five lawmakers who submitted the motion called on Wiebes to especially focus on draft legislation that would introduce a minimum salary threshold that companies must meet in order to qualify as residents for corporate income tax purposes.

The Dutch government has also been asked to include proposals that would expand the corporate tax base in the 2018 budget, set to be presented in September.

Rulings Behind Closed Doors

Lawmakers also called on the government to ensure more transparency on “agreements” concluded between resident companies and Dutch tax authorities in view of the many rulings, the motion noted, currently concluded behind closed doors.

Dutch lawmakers also want the government to disclose, before May 1:

  •  the amount of rulings already exchanged as part of the Organization for Economic Cooperation and Development and European Union’s exchange of information provisions;
  •  the number of rulings adjusted before being exchanged;
  •  whether rulings have surfaced that aren’t in conformity with “existing laws;"
  •  whether rulings were found that aren’t in conformity with “existing policies.”
In a related motion, lawmakers also called on the Dutch government to develop a law proposal ensuring improved oversight on the contents of rulings granted by local tax authorities.

Wiebes is likely to respond to the motions in the coming weeks, and likely before March, when the Netherlands will hold its general elections.

To contact the reporter on this story: Linda A. Thompson in Brussels at correspondents@bna.com

To contact the editor responsible for this story: Penny Sukhraj at psukhraj@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request International Tax