Enquiry established into tax on multinationals’ profits

29 February 2008

Enquiry established into tax on multinationals’ profits

Following strong pressure from the SP and Green Left, Secretary of State for Finance Jan Kees de Jager has promised an enquiry into the amount of tax paid by multinational corporations (MNCs). SP Member of Parliament Ewout Irrgang, the party's parliamentary spokesman on financial affairs, has the strong suspicion that in the Netherlands major MNCs pay very little indeed in the way of taxes.

According to official figures, firms pay just over a quarter of their profits (25.5%) in tax. However, by using every trick in the book in moving capital between different countries, the big multinationals in reality pay far less than this. Just how much less no-one knows. De Jager has to date given no information as to how high the total gross profit of MNCs taxed in the Netherlands might be. .

Ewout Irrgang"Is the Netherlands a sort of Lichtenstein on the North Sea?" asked Irrgang rhetorically during Thursday's emergency debate, called by the SP and Green Left. Complaining about this failure to provide the figures for the gross profits earned by MNCs in the Netherlands, Irrgang said that these must be produced, and quickly. "There was all sorts of scandal when it emerged that people living on a caravan park in Vinkenslag were paying only 3 percent tax, but I haven't had confirmation from the Secretary of State that this doesn't also go for the multinationals."

Irrgang called on the Secretary of State in addition to work on the imposition on firms of a duty to include in their annual reports the figures for how much tax they had paid in each country. As things stand, they need only state a global figure. "The Secretary of State is too quick to say that the establishment of such an obligation lies outside his competence," he said.
The precise terms of the enquiry have yet to be discussed by Parliament.

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