'Honest firms and ordinary citizens are the victims of multinationals' tax evasion'

5 November 2014

'Honest firms and ordinary citizens are the victims of multinationals' tax evasion'

Because multinational corporations are having to pay less and less tax on their profits, ordinary citizens and small and medium-sized businesses must dig ever deeper.

This is confirmed by the Netherlands’ National Auditors following a comprehensive investigation into tax evasion by multinationals carried out on the initiative of the SP and the small parliamentary party the Green Left. According to the Auditors, when it comes to rates of tax on multinationals the Netherlands can even be compared to the notorious tax haven Luxembourg.

SP Member of Parliament Arnold Merkies isn’t surprised. ‘For years I’ve been hammering away about the possibilities the Netherlands offers to corporations looking to divert their profits in order to pay less tax,’ he says. ‘Because the missing tax revenues must be made up, income tax and indirect taxes such as VAT and excise duties have been going up for years. Honest entrepreneurs and hardworking members of the public are the ones to suffer from tax evasion by multinationals.’

The Auditors also conclude that Parliament has a poor oversight of tax evasion in the Netherlands and make proposals to improve this. ‘In Parliament we hear all too often about multinationals’ exotic tax constructions,’ says Merkies, ‘by means of which they have to pay hardly any taxes. Unfortunately we are now constantly via leaked information getting to the bottom of what dubious agreements are being made with the tax authorities. It emerged from leaked information from Luxembourg today, for instance, that multinationals can in this way transfer billions and thereby escape their taxes. So I suggest that there should be much more openness about how much tax multinationals pay per country and about agreements made with the tax authorities.

Merkies wants to see the tax authorities making no further agreements other than with corporations which create employment opportunities in the Netherlands. In addition, they should routinely examine the consequences for the Netherlands and other countries of any such agreements made. Should these turn out to be negative, no agreement should be signed.

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