Multinationals in the Netherlands would pay a combined €600m more in taxes if ministers introduce seven simple measures, according to a report drawn up on behalf of tax minister Hans Vijlbrief.

Tax payments can be improved along two routes – one involving changes to the system, and one to combat tax evasion, according to Berard ter Haar, who chaired the advisory committee.

One example of adapting the system would be to introduce an acceptable lower limit for the amount of tax profitable companies should pay, he said.

‘At the moment, companies which make a profit in the Netherlands can end up paying no tax because they combine it with losses or deductions booked elsewhere,’ he said. ‘The commission wants to make an end to this.’

International approach

The committee also recommends countries work more closely together to develop a global system ‘without the undesirable strategies used by multinationals’.

Countries currently compete with each other when it comes to low taxes, but working together would make this fairer for all countries, the committee said.

The advisory committee was set up to look into developing a fairer tax system after a majority of MPs voted for change last year.

Tax breaks

Late last year sources in The Hague told broadcaster NOS that an end will be made to the way multinationals can offset their losses outside the Netherlands from their Dutch tax bills.

Earlier in 2019 both Shell and Philips admitted they do not pay tax on their Dutch operations because of the tax break.

The Dutch tax system allows companies like Shell and Philips with an international headquarters here the option of deducting costs against the international HQ, such as losses booked elsewhere. As a consequence, the Dutch companies are, on balance, loss making and do not have to pay any corporation tax.