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Im dutch too and im super frustrated about this. I don't care about paying taxes (I've done so for the last 20+ years) even if they go as high as 52%. But it r

Im dutch too and im super frustrated about this. I don't care about paying taxes (I've done so for the last 20+ years) even if they go as high as 52%. But it really irritates me that: - other companies with this tax deals pay almost nothing - its unfair and destroys local competition i.e a Starbucks vs mom's coffee bar.

throwawayzRUU6f 5y ago
Is the Netherlands in any way culpable in this - do they go the extra mile to help facilitate the evasion? My layman understanding of the tax evasion schemes is that there's nothing special about Ireland or the Netherlands. They're chosen due to other factors, like English proficiency, stable and well known legal framework - but the essence of the schemes could be done in nearly any western country.
- Denvercoder9 5y ago
  One reason the Netherlands was used (in the past) was that royaltys and interest paid from the Netherlands didn't have a withholding tax, so you could freely move money from "high tax" countries to "low tax" countries. That tax was introduced in January 2021, so maybe there are other reasons now.
- dtech 5y ago
  What you're saying is not entirely false, but it is naive at best. Ireland, the Netherlands & co are fully aware of these tax loopholes, even if we give them the benefit of the doubt that they were not originally intentional. They like the arrangement because it gives them a tiny - compared tot he dodged taxes - tax benefit for basically free.
  - etripe 5y ago
    > it gives them a tiny - compared tot he dodged taxes - tax benefit for basically free. Well, if I remember correctly, the Dutch government enabled avoiding something to the tune of 30-40 billion euros last year. The benefits for the Dutch treasury were something like 24 million. Yes, you read that right - even though I probably got the exact numbers wrong, this is the order of magnitude we're talking about.
- Marazan 5y ago
  No, there re absolutely special features of Netherlands and Ireland. Ireland specifically had a tax setup that allowed the creation of a "virtual" European Headquarters that was not in any tax jurisdiction that sales could be booked against.
  - martinald 5y ago
    Don't think that's accurate. All EU states allow a HQ like that. What Ireland did differently was allow companies to offset huge amounts of tax with complex IP transfer agreements to offshore jurisdiacations (Bermuda primarily) - called the Double Irish. And - more importantly - when this was "shut down" by the EU, there was another option called "Single Malt", which I believe is quasi shut down now or was meant to be in 2020. I'm not sure if there is a replacement but I imagine there is. You can read this all on the "Double Irish arrangement" on Wikipedia. What Ireland has done differently is show multinational companies that even if the EU/whoever puts pressure on one scheme they will try and come up with another one. Personally, I think the tax loss is unjustifiable - I think Apple's EU corp tax rate was something like 0.002% or something. I don't have a problem with Ireland's aggressive 12.5% tax rate per se, but setting up schemes which deprives European states of corp tax revenue and charging far under <1% is not cool IMO. It does seem that the US is finally fed up of this with the minimum corp tax proposals though.
- elmo2you 5y ago
  There are certainly special features that make the Netherlands attractive for foreign multinationals. The Dutch government has, for a long time, actively presented itself (euphemistically) as a great place for foreign business. They of course would not openly advertise that as a tax avoidance opportunity, but you do the match. While I'm not sure if this still happens today, the Dutch IRS used to have "special arrangements" with many big companies, for which the details were notoriously never made public. I believe this mostly applied to companies with a physical presence within the country (therefore also impacting the local society and economy and used as rhetorical justification for these deals). Still, since these deals where made behind closed doors, who knows what they may have arranged with foreign multinationals. The problem with having any confidential deals, is that it becomes impossible to know what goes on as a whole (until a whistle-blower may steps forward). It doesn't mean there is any conspiracy going on, just that it becomes impossible (or at least really hard) to rule it out. History does have something to teach about what usually happens when opportunities for abuse are readily available, without much public scrutiny. To drive this point a little further: Dutch citizens were relatively recently confronted with how their IRS turned out to not be quite the impeccable (or even legally operating) agency it is supposed to be. With that in mind, only God (and the IRS itself) knows what the agency exactly does with multinational corporation. I'd say they certainly lost the benefit of a doubt by now.
  - emn13 5y ago
    I think framing matters a lot here. I'm sure the dutch were particularly pragmatic in this regard, but fundamentally, the EU/US corporate tax system is based on profits, unlike for individuals, where it's based on revenue (aka income). And unfortunately, profits are largely a bookkeeping exercise - intrinsically so, not just due to tax loopholes. After all, who is to say which part of a multinational "created" the value? Between legal entities profit shifting via IP licenses or loans is indistinguishable from... actual IP license costs or loans. As long as there are tax differences between jurisdictions and means to shift profits (but e.g. within the EU those are a given as part of the single market), this problem isn't going away. I think the problem is in the whole concept of taxing profit, rather than revenue.
    - 5y ago
- throwaway210222 5y ago
  Culpable? No. Its not well known, but large multinationals actually get ("opinions", "guidance", etc.) from their tax authorities ahead of the implementation of a tax scheme. The polemic in the press is that the tax authorities 'uncovered' a scheme. This is more-often not the case.
bko 5y ago
> its unfair and destroys local competition i.e a Starbucks vs mom's coffee bar. Do you think tax compliance is higher in small local businesses than large mega corps? Based on my experience in the US, tax fraud is much easier and more common with small businesses. Think about how many small shops don't even have a proper point of sales system, encourage cash, and hire under the table. Stackbucks would not be able to get away with that > The agency [IRS] estimates that it collects $458 billion a year less in taxes from all Americans than the government is actually due. Most of that “tax gap” is income that goes unreported, and the biggest chunk of it, by far — $125 billion — is individual business income. [0] https://www.nytimes.com/2016/06/16/business/smallbusiness/why-the-irs-fails-to-crack-the-small-business-tax-nut.html https://www.nytimes.com/2016/06/16/business/smallbusiness/wh...
- poooogles 5y ago
  >Do you think tax compliance is higher in small local businesses than large mega corps? I can't speak for anywhere but the UK, but yes 100%. Small businesses overall tax burden is much higher than large multinationals.
  - VBprogrammer 5y ago
    That can be true while tax evasion is rife. There can't be too many reasons our plasterer expected £4000 worth of work paid in cash. Any honest business would worry about the costs involved in handling that much cash. Of course plastering is a very labour intensive process and it would be easy to pay all of the guys cash in hand. Another time I asked our plumber if she minded receiving a large amount of cash (which we'd been legally given by our grandparents) she said it made no difference, she would have to put it into her bank because she was applying for a mortgage.
- pwagland 5y ago
  To some extent this is true. It is easier to slide cash under the table to the owner, that said, most cafes where I live are not "mom and pop only" shops. They have employees, even if only a few, and thus tend to have POS etc. It is _very_ uncommon in The Netherlands to not have a POS in except in some market stalls. Almost everyone accepts PIN, and increasingly few people carry cash at all. The main point is that even if you are only paying (eg 35%) tax on ~70% of your income, you are still paying more than some of these multi-nationals that are paying 0% on 100% of the income. UK story, but similar concept applies in The Netherlands: https://www.channel4.com/news/starbucks-coffee-income-tax-uk https://www.channel4.com/news/starbucks-coffee-income-tax-uk Specifically: > Its nearest UK rival, Costa, recorded £377m sales last year, compared to Starbucks’s £398m in 2011, and its tax bill came to £15m, or 31 per cent of profits. Costa is 100% not a mom and pop shop, they are a massive chain, like Starbucks.
kossTKR 5y ago
The same thing is happening in _all_ countries. I'm from Scandinavia, and plenty of large US corporations pay zero taxes because of very complex arrangements. Regular people with smaller companies have to pay high taxes though. It's called soft imperialism. The US / Transnational empire forces all countries to "open their markets", either via direct war, og in allied states, via soft power. Then various firms like McKinsey or Goldman working more or less as extensions of the CIA sets up shops to takeover markets and siphon money from local markets towards a tiny US / Transnational elite. It's a system that promotes "free markets" but is actually just rule by the VHNWI's. In Europe in particular this power grab came especially after the clauses in the Marshal Plan that helped rebuild western europe after WW2, but in effect making them vassal states to the US. So there is no "choice" here, that's why even in the richest northern European states american corporations pay zero taxes. It's not just a US empire problem though - after a certain size companies just become above the law, just as with private equity for individuals, when a company can hire someone like Ernst & Young, Deloitte, PricewaterhouseCoopers etc. they can essentially just avoid taxes.
- MomoXenosaga 5y ago
  The Chinese never opened up their markets for US/Western corporations. I observe that they have their own local, Chinese equivalents to Amazon and Google.
- demadog 5y ago
  Is there a good book that dives into this topic in more detail?
  - js8 5y ago
    Not about taxes specifically, but about the problems of the free market policies: https://en.wikipedia.org/wiki/Bad_Samaritans:_The_Myth_of_Free_Trade_and_the_Secret_History_of_Capitalism https://en.wikipedia.org/wiki/Bad_Samaritans:_The_Myth_of_Fr...
  - beckman466 5y ago
    Zak Cope's 'The Wealth of (Some) Nations': https://www.goodreads.com/book/show/43015121-the-wealth-of-some-nations https://www.goodreads.com/book/show/43015121-the-wealth-of-s...

throwawayzRUU6f 5y ago

Is the Netherlands in any way culpable in this - do they go the extra mile to help facilitate the evasion? My layman understanding of the tax evasion schemes is that there's nothing special about Ireland or the Netherlands. They're chosen due to other factors, like English proficiency, stable and well known legal framework - but the essence of the schemes could be done in nearly any western country.

Denvercoder9 5y ago
One reason the Netherlands was used (in the past) was that royaltys and interest paid from the Netherlands didn't have a withholding tax, so you could freely move money from "high tax" countries to "low tax" countries. That tax was introduced in January 2021, so maybe there are other reasons now.
dtech 5y ago
What you're saying is not entirely false, but it is naive at best. Ireland, the Netherlands & co are fully aware of these tax loopholes, even if we give them the benefit of the doubt that they were not originally intentional. They like the arrangement because it gives them a tiny - compared tot he dodged taxes - tax benefit for basically free.
- etripe 5y ago
  > it gives them a tiny - compared tot he dodged taxes - tax benefit for basically free. Well, if I remember correctly, the Dutch government enabled avoiding something to the tune of 30-40 billion euros last year. The benefits for the Dutch treasury were something like 24 million. Yes, you read that right - even though I probably got the exact numbers wrong, this is the order of magnitude we're talking about.
Marazan 5y ago
No, there re absolutely special features of Netherlands and Ireland. Ireland specifically had a tax setup that allowed the creation of a "virtual" European Headquarters that was not in any tax jurisdiction that sales could be booked against.
- martinald 5y ago
  Don't think that's accurate. All EU states allow a HQ like that. What Ireland did differently was allow companies to offset huge amounts of tax with complex IP transfer agreements to offshore jurisdiacations (Bermuda primarily) - called the Double Irish. And - more importantly - when this was "shut down" by the EU, there was another option called "Single Malt", which I believe is quasi shut down now or was meant to be in 2020. I'm not sure if there is a replacement but I imagine there is. You can read this all on the "Double Irish arrangement" on Wikipedia. What Ireland has done differently is show multinational companies that even if the EU/whoever puts pressure on one scheme they will try and come up with another one. Personally, I think the tax loss is unjustifiable - I think Apple's EU corp tax rate was something like 0.002% or something. I don't have a problem with Ireland's aggressive 12.5% tax rate per se, but setting up schemes which deprives European states of corp tax revenue and charging far under <1% is not cool IMO. It does seem that the US is finally fed up of this with the minimum corp tax proposals though.
elmo2you 5y ago
There are certainly special features that make the Netherlands attractive for foreign multinationals. The Dutch government has, for a long time, actively presented itself (euphemistically) as a great place for foreign business. They of course would not openly advertise that as a tax avoidance opportunity, but you do the match. While I'm not sure if this still happens today, the Dutch IRS used to have "special arrangements" with many big companies, for which the details were notoriously never made public. I believe this mostly applied to companies with a physical presence within the country (therefore also impacting the local society and economy and used as rhetorical justification for these deals). Still, since these deals where made behind closed doors, who knows what they may have arranged with foreign multinationals. The problem with having any confidential deals, is that it becomes impossible to know what goes on as a whole (until a whistle-blower may steps forward). It doesn't mean there is any conspiracy going on, just that it becomes impossible (or at least really hard) to rule it out. History does have something to teach about what usually happens when opportunities for abuse are readily available, without much public scrutiny. To drive this point a little further: Dutch citizens were relatively recently confronted with how their IRS turned out to not be quite the impeccable (or even legally operating) agency it is supposed to be. With that in mind, only God (and the IRS itself) knows what the agency exactly does with multinational corporation. I'd say they certainly lost the benefit of a doubt by now.
- emn13 5y ago
  I think framing matters a lot here. I'm sure the dutch were particularly pragmatic in this regard, but fundamentally, the EU/US corporate tax system is based on profits, unlike for individuals, where it's based on revenue (aka income). And unfortunately, profits are largely a bookkeeping exercise - intrinsically so, not just due to tax loopholes. After all, who is to say which part of a multinational "created" the value? Between legal entities profit shifting via IP licenses or loans is indistinguishable from... actual IP license costs or loans. As long as there are tax differences between jurisdictions and means to shift profits (but e.g. within the EU those are a given as part of the single market), this problem isn't going away. I think the problem is in the whole concept of taxing profit, rather than revenue.
  - 5y ago
throwaway210222 5y ago
Culpable? No. Its not well known, but large multinationals actually get ("opinions", "guidance", etc.) from their tax authorities ahead of the implementation of a tax scheme. The polemic in the press is that the tax authorities 'uncovered' a scheme. This is more-often not the case.

bko 5y ago

> its unfair and destroys local competition i.e a Starbucks vs mom's coffee bar. Do you think tax compliance is higher in small local businesses than large mega corps? Based on my experience in the US, tax fraud is much easier and more common with small businesses. Think about how many small shops don't even have a proper point of sales system, encourage cash, and hire under the table. Stackbucks would not be able to get away with that > The agency [IRS] estimates that it collects $458 billion a year less in taxes from all Americans than the government is actually due. Most of that “tax gap” is income that goes unreported, and the biggest chunk of it, by far — $125 billion — is individual business income. [0] https://www.nytimes.com/2016/06/16/business/smallbusiness/why-the-irs-fails-to-crack-the-small-business-tax-nut.html https://www.nytimes.com/2016/06/16/business/smallbusiness/wh...

poooogles 5y ago
>Do you think tax compliance is higher in small local businesses than large mega corps? I can't speak for anywhere but the UK, but yes 100%. Small businesses overall tax burden is much higher than large multinationals.
- VBprogrammer 5y ago
  That can be true while tax evasion is rife. There can't be too many reasons our plasterer expected £4000 worth of work paid in cash. Any honest business would worry about the costs involved in handling that much cash. Of course plastering is a very labour intensive process and it would be easy to pay all of the guys cash in hand. Another time I asked our plumber if she minded receiving a large amount of cash (which we'd been legally given by our grandparents) she said it made no difference, she would have to put it into her bank because she was applying for a mortgage.
pwagland 5y ago
To some extent this is true. It is easier to slide cash under the table to the owner, that said, most cafes where I live are not "mom and pop only" shops. They have employees, even if only a few, and thus tend to have POS etc. It is _very_ uncommon in The Netherlands to not have a POS in except in some market stalls. Almost everyone accepts PIN, and increasingly few people carry cash at all. The main point is that even if you are only paying (eg 35%) tax on ~70% of your income, you are still paying more than some of these multi-nationals that are paying 0% on 100% of the income. UK story, but similar concept applies in The Netherlands: https://www.channel4.com/news/starbucks-coffee-income-tax-uk https://www.channel4.com/news/starbucks-coffee-income-tax-uk Specifically: > Its nearest UK rival, Costa, recorded £377m sales last year, compared to Starbucks’s £398m in 2011, and its tax bill came to £15m, or 31 per cent of profits. Costa is 100% not a mom and pop shop, they are a massive chain, like Starbucks.

kossTKR 5y ago

The same thing is happening in _all_ countries. I'm from Scandinavia, and plenty of large US corporations pay zero taxes because of very complex arrangements. Regular people with smaller companies have to pay high taxes though. It's called soft imperialism. The US / Transnational empire forces all countries to "open their markets", either via direct war, og in allied states, via soft power. Then various firms like McKinsey or Goldman working more or less as extensions of the CIA sets up shops to takeover markets and siphon money from local markets towards a tiny US / Transnational elite. It's a system that promotes "free markets" but is actually just rule by the VHNWI's. In Europe in particular this power grab came especially after the clauses in the Marshal Plan that helped rebuild western europe after WW2, but in effect making them vassal states to the US. So there is no "choice" here, that's why even in the richest northern European states american corporations pay zero taxes. It's not just a US empire problem though - after a certain size companies just become above the law, just as with private equity for individuals, when a company can hire someone like Ernst & Young, Deloitte, PricewaterhouseCoopers etc. they can essentially just avoid taxes.

MomoXenosaga 5y ago
The Chinese never opened up their markets for US/Western corporations. I observe that they have their own local, Chinese equivalents to Amazon and Google.
demadog 5y ago
Is there a good book that dives into this topic in more detail?
- js8 5y ago
  Not about taxes specifically, but about the problems of the free market policies: https://en.wikipedia.org/wiki/Bad_Samaritans:_The_Myth_of_Free_Trade_and_the_Secret_History_of_Capitalism https://en.wikipedia.org/wiki/Bad_Samaritans:_The_Myth_of_Fr...
- beckman466 5y ago
  Zak Cope's 'The Wealth of (Some) Nations': https://www.goodreads.com/book/show/43015121-the-wealth-of-some-nations https://www.goodreads.com/book/show/43015121-the-wealth-of-s...