Multinational companies which conduct business in the Netherlands will soon be forced to pay taxes on their profits, instead of creatively using an accounting loophole to avoid tax liabilities in the country. The ruling Dutch cabinet, led by third-term Prime Minister Mark Rutte, has reportedly agreed to back an initiative from the left wing opposition parties, according to broadcaster NOS and newspaper AD, both citing unnamed sources.
Shell paid no taxes on the billions of euros in profit it made in the Netherlands over the past years, Marjan van Loon, director of Shell Netherlands, admitted to magazine Elsevier.
The left-wing opposition parties GroenLinks, SP and PvdA want multinationals like Shell to pay profit tax in the Netherlands. They are submitting a bill to achieve this to the Tweede Kamer, the lower house of Dutch parliament, later this week, NOS reports.
Shell has not paid any profit tax in the Netherlands for years, despite earning billions of euros in the country every year, newspaper Trouw reports based on "well informed" sources and a confidential internal document from the Ministry of Finance.
American companies settling in Europe are increasingly opting for a country other than the Netherlands. "The Netherlands is not automatically the first choice anymore", Patrick Mikkelsen, director of AmCham, the American Chamber of Commerce in the Netherlands, said to newspaper AD.
The Americans are critical of the Dutch business climate and believe that the Netherlands should implement changes quickly. Criticisms include high corporate tax in the Netherlands, and planned changes to a favorable tax regulation for expats.
The Dutch tax rules are attractive to large multinationals. The same is true for countries such as the United Kingdom, Switzerland and Luxembourg.