International

Labour Party Finance Minister Jeroen Dijsselbloem has recently been arguing in favour of higher taxes on corporations. SP Members of Parliament Arnold Merkies and Ronald van Raak observe that in practice he is doing something quite different.

In an opinion piece in a recent edition of national daily AD, which carried the catchy headline ‘Stop tax incentives for major corporations’, Jeroen Dijsselbloem argued that multinationals should make a bigger tax contribution. His plans include things about which we could negotiate, but this is the same Dijsselbloem who, as Minister of Finance, maintained tax incentives for multinationals and opposed a fair contribution from such corporations.

The social democrat Dijsselbloem is correct when he says that the balance between big business and small businesses when it comes to the pressure of taxation is too great. Yet his own government has ensured that corporations whose profits exceed €200,000 pay less tax. The SP proposed using the same budget to lighten taxes on small firms. This was rejected by the government, which argued that lowering taxes on big business is better for the investment climate. Isn’t this an incentive for major corporations?

Dijsselbloem announces with pride that he and Liberal Secretary of State for Finance Eric Wiebes have ensured greater transparency. Meanwhile the Netherlands is still the European champion of doing tax deals with multinationals, and what is agreed in those deals no-one knows. That they are anything but clean is demonstrated by the case of Starbucks. The European Commission is forcing the Netherlands to demand €25m in back taxes from the coffee giant as a result of unjustified tax advantages.

The Netherlands has a bad name when it comes to tax evasion, one which is certainly not unjustified. Our country turns out to be outstandingly the tax haven for US Fortune 500 corporations. According to Irish research, American multinationals on Dutch soil continue to pay less than 4% tax. Recent research by Oxfam described the Netherlands as the world’s third most important tax haven, offering more opportunities for tax evasion than any other EU member state, with the European Commission counting seventeen ways in which taxes can be evaded. A well-known trick of multinationals dodging their taxes is the what’s known as the CV/BV structure, under which a Dutch limited partnership (CV) is established with two US resident subsidiaries of the multinational which participate as partners in the CV, which holds all the shares in a Dutch operating company (BV). Earnings are channelled via the BV to the CV as distributions of dividend or payments of interest and royalties. The CV is not taxed on this income because it is subject to neither Dutch nor US corporate tax, due to a mismatch in the classification of CV. The SP has urged many times that something be done about this, while the government has repeatedly let it be known that it is not willing to act.

Dijsselbloem’s claim that he is addressing this is the opposite of the truth. This measure is not being taken thanks to him, but in spite of him. The Netherlands is the country which is holding the whole thing back. While a parliamentary majority is opposed to Dijsselbloem resisting it, he is argiuing at EU level for a postponement to 2024. In his opinion piece the minister argues for higher taxes on profits. Yet less than two months ago he did precisely the opposite when he said that such taxes could be lowered. His argument sounds good, but as long as in practice he does the opposite, his leftish words are completely untrustworthy.