The Netherlands attracted foreign direct investment of $3.5 trillion by the end of last year, but just $573bn ended up in the ‘real economy’, the Financial Times said on Monday, quoting OECD figures.

The rest went to what the paper called ‘special purpose entities’, the letterbox firms and holding companies designed to help big business avoid tax, the FT said.

OECD secretary general Angel Gurría has called on governments to make reforms to their tax regimes.  ‘We cannot blame business for using the rules that policy makers themselves have put in place,’ the FT quoted him as saying.

Debate

There has been considerable debate in the Netherlands recently about its role as a tax haven, helping multinationals avoid large tax bills at home.

In April, parliament gave ministers until the summer to come up with a plan to stop foreign firms setting up shop in the Netherlands with the sole purpose of reducing their tax bill.

A majority of MPs, including the ruling Labour party, voted in favour of a motion calling on ministers to come up with a plan to reduce the Netherlands’ role as a location to simply transfer money.

The motion quoted Labour leader Diederik Samsom, who told a television show last month: ‘I don’t like the idea the Netherlands is a tax haven… I think it is a bad idea to levy little tax on companies that don’t do anything here, but just move money along.’

Letterbox companies are listed in the Netherlands on paper in order to profit from special Dutch tax deals. As well as multinationals like Starbucks and Ikea, the Rolling Stones and U2 are also based in the Netherlands for tax purposes.

Earlier stories
MPs call for action on tax havens, plan should be ready by the summer
Shell and state bank ABN Amro are masters at tax avoidance
Research into letterbox companies is biased, say critics
Multinationals and French state companies use Dutch tax deals
Tax deals for letter box firms under fire, MPs demand change
Starbucks under fire in Britain over Dutch tax deal
EU wants an end to letterbox companies
Letterbox companies largely exempt from tougher rules
The Netherlands is a popular tax haven for FTSE 100 firms
Holland no longer a US tax haven
More tax levied over tax haven income