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Jan Vleggeert: Reservations about reduction in tax avoidance via the Netherlands

The Dutch Ministry of Finance says that new rules have significantly reduced tax avoidance via 'transit country' the Netherlands. Jan Vleggeert, Professor of Tax Law, has voiced his reservations about this claim in the media.

Jan Vleggeert

In a letter to the House of Representatives, Secretary of State Marnix van Rij (Tax Affairs and Tax Administration) has claimed that various measures in recent years have led to a reduction in tax avoidance via the Netherlands. In particular, the introduction early in 2021 of a source tax of 25.8 percent on interest and royalties transferred to countries with a low – or no – tax rate, has worked according to the Secretary of State.

However, Jan Vleggeert is less optimistic than the Secretary of State about the strategy to tackle tax avoidance. In Dutch newspapers de Volkskrant and the Financieele Dagblad he refers to the definition of ‘low-tax countries’. In relation to source tax, these are countries with a profit tax of 9 percent or less, plus the countries on the European tax haven black list, in total around 20 countries. But according to Vleggeert, there are far more countries that offer certain facilities to end up levying less than 9 percent profit tax in practice.

In addition,  the professor, who has written extensively about the Netherlands as a tax haven, questions whether the reduction is not mainly the result of European measures against tax avoidance, rather than unilateral Dutch steps.

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