Friday, February 29, 2008

Dutch multinationals: questions in parliament

Something rather similar is emerging in Britain and the Netherlands: a series of debates and comments in the newspapers, and questions in both countries' parliaments, about how multinational companies use offshore structures to avoid tax. Our last blog described efforts by British MPs to expose Britain's tax avoidance culture. Now we have something very similar emerging in the Netherlands. We blogged very recently on this: an investigation by the high-brow newspaper NRC on how little tax some multinationals pay.

Now, as NRC reports again, we have questions being asked in the Dutch parliament. If you read Dutch, you can follow the debate itself here. Otherwise, you will have to be contented with TJN's informal translation of some excerpts from the NRC article. It concerns questions put to Jan Kees de Jager, Dutch State Secretary for Finance, who said he disagreed with some aspects of the previous NRC article (adding that it was "undesirable" that tax officials had discussed these things with NRC.) He said that a law introduced last year called “werken aan winst” had led to some hollowing out of the tax base, but that this hole had been repaired.

That does not mean that no hollowing-out of the tax base takes place, but that has to do with international develpoments. Companies make increasing use of interest deductibility and financial constructions.” The development that less tax is paid through this hollowing-out worries de Jager. It could be that the government should think about measures he said “but the picture that has been painted that only five of the 23 AEX companies pay tax – I want to forcefully refute.”

The parliamentarian Paul Tang demanded more information about how much tax multinationals pay compared to smaller companies; previously de Jager had not answered written questions on the subject. NRC continued:

The parliamentary parties all want more transparency. Kees Vendrik (Green Left) called for a “lifting of the veil” – “who pays how much?” Multinationals should, even if not voluntarily, have to give information in their annual reports about how much they pay in each country.

De Jager has promised to provide more information.

Country by country reporting - now there is a thing. This is what TJN has been campaigning for. If achieved, it could change the world. Read more about it here.

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