Dutch dodge €10 billion in taxes with offshore scheme

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Wealthy Dutch people are abusing tax havens abroad to prevent from being taxed on 129 billion euros in deposits, a former tax inspector told television show Nieuwsuur. The money is held in the accounts of shell companies based in the Cayman Islands, Seychelles and Virgin Islands, among other locations, the researcher, Jan van Koningsveld, said.

“If we assume that 80 percent is not declared to the tax authorities, it means that using the average tax rate of about ten percent, wealthy people in the Netherlands may well be short on tax payments by ten billion,” he stated. Criminals are often among the abusers of tax havens, he said, adding that the practice enables money laundering, investment fraud, tax fraud, corruption and drug trafficking.

The work is part of Van Koningsveld’s doctoral thesis, to be presented at Tilburg University on Wednesday.

The use of a shell company, or mailbox company, is not illegal in many cases, which can include getting a higher return on deposits, NU.nl reported. However, in many instances they are used for no reason other than dodging taxes, Van Koningsveld alleged.

The prosecutor’s office does work hard to track down fraudsters who use complex structures of mailbox companies in multiple countries with multiple bank accounts. But former fraud investigator Fred Spielers said the office simply may not have the manpower to make strong cases.

Dutch money in shell company accounts makes up about 2.6 percent of the five trillion euros held in offshore bank accounts worldwide.