As the FT notes this morning:
The Netherlands and Luxembourg had booked foreign direct investment of $5.8tn by the end of 2012 – more than the US, UK and Germany combined, according to data that will fuel controversy over aggressive corporate tax policies.
With the G20 pledging to crack down on multinational tax avoidance the FT looks at how and why governments help companies reduce their tax burden
The OECD figures show the Netherlands attracted FDI of $3.5tn by the end of last year with stocks – the value of cumulative capital investment – of $3.5tn, though just $573bn ended up in the “real” Dutch economy.
The rest went to special purpose entities, the finance and holding companies often designed to help big businesses avoid tax.
Luxembourg booked $2.28tn in FDI but just $122bn entered the real economy.
Remember this data the next time the Netherlands and Luxembourg say they aren't tax havens and don't just laugh ironically; demand action.
It is time for the EU to tackle this abuse by these states, by capital controls if necessary. I have written about them here. And yes, let's be clear, if the free flow of capital is all about abuse the time has come to end it in the interests of something much more important, and that's human rights.