De Jong: OECD action plan strikes blow to tax haven Netherlands

19 July 2013

De Jong: OECD action plan strikes blow to tax haven Netherlands

The club of rich industrialised countries, the Organisation for Economic Cooperation and Development (OECD) today presented its proposals to counter tax evasion and tax avoidance to the G20, the informal body which brings together Finance Ministers and Central Bank Governors from twenty major economies. Should these proposals be adopted, the SP believes that an end will be brought to many of the practices of the Netherlands and others who foster such tax dodging. ‘The OECD wants to put an end to the secret agreements between multinationals and tax offices,’ says De Jong. ‘That’s a matter which both the Dutch and the European Parliaments have hammered away at for years. According to the action plan the OECD intends to inventorise its member states’ practices and by the end of 2014 at the latest establish a system of oversight. After that states will be obliged to fully inform each other about all tax agreements. That’s an important step forwards, but I want to see this information then being made available to parliaments, because otherwise we will still have no way of gaining any insight, in our role as the people’s representatives, into what precisely is going on.’

Dennis de JongIn addition to putting an end to secret tax agreements, the action plan makes more concrete proposals of a kind which the SP sees as badly needed. ‘They propose for example that there should be stricter anti-abuse rules in tax treaties, which would make it possible for countries to tax corporations where they are actually active, preventing them to dodge their taxes using a country with extremely low rates,’ says De Jong. ‘This represents a major adjustment to the existing rules. It also means that the EU has its work cut out to amend its rules to fit the new OECD proposals.’

In the SP’s view, the OECD has made valuable proposals, and now the task is to apply them seriously in the form of tightened-up rules to be applied within two years. ‘The present government under Mark Rutte is trying to hide behind the argument that there’s a lack of international agreements, an argument which will soon no longer apply,’ De Jong argues. ‘So there’s no reason whatsoever why the government should wait to amend its tax policies so that multinationals established in the Netherlands will at last simply pay tax. In the EU alone an estimated thousand billion in tax revenues is misdirected annually through tax evasion and tax avoidance, with the Netherlands playing a major role. The OECD correctly observes that this unpaid tax must be made up for by the public and by small firms coughing up. A end must be put as quickly as possible to this unfair situation.’

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