Netherlands still plays key role in global tax avoidance

The Netherlands continues to play a major role in tax avoidance worldwide. As part of the “tax avoidance chain,” the Netherlands, together with the United Kingdom, Luxembourg, and Switzerland, is responsible for 33 percent of the global losses due to corporate tax avoidance. At 23 percent, a large part is accounted for by the UK and its overseas territories, according to the annual report State of Tax Justice by the non-profit organization Tax Justice Network.

The Netherlands, among others, allows large companies to channel their billions in profits into the country and, in this way, pay tax at a lower rate of less than 10 percent. For every dollar in tax that the Netherlands collects, the rest of the world misses out on over 5 dollars.

“Almost three-quarters of the 348 billion dollars lost worldwide due to corporate tax abuse ends up in jurisdictions like the Netherlands, where the effective tax rates are below 10 percent. This is a system that only benefits a very small group of multinationals and is detrimental to many,” said Bram Joanknecht, an economic expert at the aid organization Oxfam Novib.

Like the Netherlands, the UK and some of its overseas territories, Singapore, Hong Kong, Luxembourg, and Puerto Rico are also among the places where multinationals effectively pay less than 10 percent tax, according to the report.

“One of the solutions is the introduction of the UN tax treaty. This ensures that all countries in the world can participate in decisions on international tax agreements, instead of only the rich countries that are members of the OECD. The Netherlands must support this plan for a UN tax treaty and take a leading role within the EU so that the international tax system becomes fairer for everyone,” said Joanknecht.