Dutch bluff

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The US publication The Hill has reported:

The White House on Monday angered the Dutch Embassy by lumping the Netherlands in with a group of "low-tax countries" some corporations use to avoid paying U.S. taxes.

Ambassador Renee Jones-Bos reached out to both the White House and the Treasury Department to express her displeasure with a fact sheet released by the administration that said "nearly one-third of all foreign profits reported by U.S. corporations in 2003 came from just three small, low-tax countries: Bermuda, the Netherlands and Ireland."

The fact sheet was released in connection with the administration's announcement Monday of policies intended to close tax havens.
"We were greatly surprised to see The Netherlands appear in this paper, because we are working together with the U.S. - also in a G20 framework - in dealing with countries that have bank secrecy or are non-transparent," spokesman Floris van H??vell. "The Netherlands shares tax-related information with the U.S. without reservation."

This is absolute nonsense. The Netherlands is a tax haven. There are two reasons. First, whilst it is not a secrecy jurisdiction i.e. a place that intentionally creates regulation for the primary benefit and use of those not resident in their geographical domain that is designed to undermine the legislation or regulation of another jurisdiction and that, in addition, creates a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so, it is does undoubtedly fulfil the first part of this criteria. It is brazenly seeking to artificially reallocate profits to its domain. In the process it is seeking to subvert tax compliance.  Tax compliance is seeking to pay the right amount of tax (but no more) in the right place at the right time where right means that the economic substance of the transactions undertaken coincides with the place and form in which they are reported for taxation purposes.

So it may be cooperating against secrecy jurisdictions. That does not matter. It is still a tax pariah, like Ireland and Bermuda, and is rightly identified as such by the USA.

The moral is this: there’s always more than one way to abuse. The Dutch had better take notice.


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