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How much tax do they pay and where? Leijten demands openness from multinationals

11 April 2017

How much tax do they pay and where? Leijten demands openness from multinationals

SP Member of Parliament Renske Leijten wants it made compulsory for multinational corporations (MNCs) to declare how much tax they pay and where they pay it. A range of studies and reports have demonstrated that MNCs use a variety of structures to ensure that they pay as little tax as possible. Developing countries are among those who are losing many billions every year in tax receipts as a result.

According to Leijten tackling tax avoidance has to begin with clarity regarding the tax paid by MNCs. “That multinationals are capable of avoiding tax is now well-known,” she says. “That the Netherlands loses a great deal in tax receipts every year is also known. But we don’t always as yet know the scale of this, or whether they pay their taxes honestly in the countries in which they are established. Only when we have clarity on these matters can the problem be addressed directly.”

The government claims to support the demand for openness, but in Leijten’s view its approach falls well short of what’s needed. “Unfortunately the ministers responsible for financial matters, Eric Wiebes and Jeroen Dijsselbloem, can’t see the urgency,” she says. “They want only the very biggest corporations, those with an annual turnover above €750 million, to be forced to be make public the taxes they pay in the countries in which they are established. Yet this excludes 85-90% of all multinationals. Moreover these enormous multinationals are only obliged to declare taxes paid in EU countries and in notorious tax havens. The big losers from tax avoidance, people in developing countries, still won’t know any time soon how much a corporation pays into the state coffers. I want people in the developing world to be able to assess the companies which are active in their countries for themselves. For that, openness about taxes is absolutely necessary.”

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