The Netherlands in favor of G7 plan to eliminate tax havens

The caretaker Cabinet voiced their support for the plan of the seven major economies in the G7 to introduce a minimum global corporate tax rate of 15 percent. The initiative was introduced as an effort to discourage tax evasion worldwide.

The plan would force giant tech companies such as Apple, Facebook, Google and Amazon to pay taxes in the countries where they generated their revenues. Currently, they only have to pay taxes in countries where they are located which facilitates tax avoidance.

The strategy would also end the so-called ‘race to the bottom’ whereby countries compete with each other to bring their tax rates as low as possible to attract companies. The agreement was signed in London on Saturday by the finance ministers of the countries in the G7: Canada, France, Germany, Italy, Japan, the United States and the United Kingdom.

The outgoing Cabinet is pleased with the deal “The Netherlands supports these plans. This way we can effectively tackle tax avoidance”, State Secretary of Finance, Hans Vijlbrief, wrote on Twitter.

https://twitter.com/stasVijlbrief/status/1401203847377391627

Vijlbrief also said he is working on implementing the agreement as soon as possible in the EU. The G7 countries all already have a corporate tax rate of 15 percent, yet in the EU some countries are below that level. In Ireland and Cyprus company tax rates are only 12.5 percent and in Hungary only nine percent.

The Netherlands has also been known as a tax haven for large businesses. Major companies such as Netflix and the four largest tobacco companies, British American Tobacco, Philip Morris, Japan Tobacco and Imperial Brand used shell companies in the Netherlands to avoid taxes.

Earlier in the week, Vijlbrief told De Nieuws BV that if companies start paying more taxes, the average citizen might have their taxes reduced.