Netherlands no tax haven for businesses in developing countries

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The Netherlands will sign treaties with 23 African nations aimed at preventing locally operating enterprises from using Dutch jurisdiction to evade taxation in their countries. The enterprises will be prevented from formally locating themselves in the Netherlands simply by registering a post office box, reports Volkskrant.

Development Minister Lilianne Ploumen signed the first treaty with Malawi on Sunday. “It is very important that the initiative comes from developing countries," Ploumen said after the signing.

The treaty signed with Malawi could serve as an example for the forthcoming agreements with other 22 African states. The Dutch government hopes that such measures will contribute to fighting poverty in those countries by generating extra tax revenues for local governments.

“We should allow countries to tax their resources in a transparent way. A dollar invested in the end produced a tenfold [effect on that]”, commented Ploumen.

The Netherlands is often criticized for performing as a tax haven, though the minister disagrees with this assertion. Groups such as Tax Justice Network criticized how companies used the Netherlands to stay out of reach of the tax authorities where they operate.