It's worth recalling in the light of my last post what the White House had to say about offshoring of profits in 2009. In that year they 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.
That then was the most recent data.
The Netherlands objected to the line that they were a tax haven and the press release was amended. That didn't change the facts though: the Netherlands was in 2003 and remains today a major tax haven. It's even amusing to note Irish commentators criticising it.
David cameron says he wants to changes to international agreements to stop tax abuse. He would do well to tackle the Netherlands and its policy of providing safe routes for royalties, dividends and capital gains to reach tax havens tax free. Thankfully with a new government in the Netherlands that may be possible. As Jesse Drucker has reported:
The Dutch Parliament has begun debate on the fairness of its tax system. Lawmakers from several parties, including members of the country's governing coalition, say they want to remove a stain on the nation's reputation.
"We should not be a tax haven," said Ed Groot, a parliament member from the Labour Party, which along with the People's Party for Freedom and Democracy took power in November. Both ruling parties are "fed up with these so-called 'PO Box companies,' " he said. "If they go somewhere else we are not sorry at all because they spoil the name of Holland. Otherwise you can wait for retaliation measures and this we don't want."
Last month, the European Commission, the European Union's executive body, declared a war on tax avoidance and evasion, which it said costs the EU 1 trillion euros, or about $1.35 trillion, a year. The commission advised member states - including the Netherlands - to create tax-haven blacklists and adopt anti-abuse rules. It also recommended reforms that could undermine the lure of the Netherlands, and hurt a spin-off industry that has mushroomed in and around Amsterdam to abet tax avoidance.
This would be a massive step forward in stopping the curse of corporate tax avoidance that lets companies from all over the world reduce their tax bills at cost to ordinary people, which is precisely why this is now an issue of such importance.
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Re blogged @ http://wp.me/p1RKvF-16l
Isn’t this all about delaying the taxation of those profits in the US, and any change would merely impact the taxation (or even only the timing of the taxation) in the US, with no change to tax revenues in other countries. So the benefit would only be to the US, and in fact if what the White House believes is true, in that US offshore profit taxation rules cause jobs to shift overseas, then it could actually be detrimental to other countries as the US businesses lose the incentive to have the jobs outside the US.
Could the state seize these assets (as the firms have seized them from the poor) and force the firms to apply for them to be re-instated, in part?
This is certainly good news, Richard, and we are at last seeing the Dutch Labour Party taking a lead on this (something they’ve avoided when in government in the past). There’s a commitment there this time, I think, so hopefully something will happen, although they will face furious lobbying from the Dutch finance sector, of course. But if they start making progress perhaps it’ll wake our own Labour Party from their dire performance on these issues. Even now, they haven’t got a single word to say that doesn’t parrot Cameron, which leaves me thinking they’re as much in thrall to big money as they ever were in Blair’s day. I can live in hope!
[…] by the outcome, and yet Gapper clearly buys this logic in the FT. He’s wrong to do so. As I mentioned yesterday, evidence from the USA is very clear: substantial profits are recorded in countries like Bermuda, […]