Silicon Valley companies warn Dutch PM over "tax climate"

A group of 80 technology companies from Silicon Valley in the United States wrote Prime Minister Mark Rutte a letter in May warning him of the consequences a deterioration in the Netherlands' tax climate will have, the Financieele Dagblad reports. The companies fear that a tougher approach from the Netherlands on multinational companies' tax avoidance will make the country less attractive for U.S. investors. The letter was written by the so-called Silicon Valley Tax Directors Group (SVTDG), which includes companies like Apple, Google and Cisco Systems. It was sent to Rutte in May, following a visit to Silicon Valley. The SVTDG offers Rutte advice on how to keep the Netherlands fiscally attractive for multinationals. If companies have fewer opportunities to make agreements and deals with the Dutch tax authorities, it will negatively affect existing and future investments from the United States. The letter writers are satisfied with how accessible the Dutch Tax Authorities currently are, as well as the ability to close "advance tax rulings". But the European Commissions's stance on these tax rulings are creating uncertainty, according to the SVTDG. Last year the European Commission ruled that one such tax ruling between the Netherlands and American coffee company Starbucks was unlawful State aid. The Netherlands appealed against this ruling. The SVTDG is pleased with the appeal. According to the tech companies, what makes the Netherlands so attractive to multinationals is its lack of tax on interest and royalties and its exemption of profit tax on profits made by subsidiaries elsewhere in the world. These are points that the European Commission plans to address. The tech companies finally advice the Dutch government to lower the income tax rate from 25 percent to well below 20 percent. According to them, this will make the Netherlands able to compete with countries like the Untied Kingdom, Switzerland and Ireland.