The amount of income shifted through the Netherlands to tax havens has gone down since 2020, according to new figures from the Dutch central bank.

The Netherlands is one of the world’s largest recipients of foreign direct investment but a “significant part” had been leaving the country immediately, for low-tax locations such as the Cayman Islands, Bermuda and the Bahamas.

“For a long time, it was financially attractive for multinationals to transfer their profits, in the form of dividends, interest income or royalties (such as trademark rights), through the Netherlands to countries with lower tax rates,” the central bank said.

However, the Netherlands has taken various measures to prevent tax avoidance in recent years, such as the introduction of a global minimum tax, a tax on dividend payments, and an end to the tax break on royalties.

Outward income flows showed a steady upward trend until 2019, to an average of over €37 billion in the period 2017-2019, the figures show.

By 2020, they had dropped sharply to around €5 billion. Since then, outward income flows have fluctuated between €5 billion and €10 billion annually; in 2023 they amounted to €7 billion, the central bank said.

“The vast majority of foreign direct investment income now consists of profits and interest,” the central bank said. “Since 2015, royalty flows have fallen sharply, from around 25% of total incomes to around 15% in 2023.”

By the end of 2023, total direct investment from abroad in Dutch companies amounted to around €4,800 billion, and from the Netherlands in foreign companies to over €5,600 billion.

Some 10,000 shell, or letter-box, companies are based in the Netherlands and are primarily used to shift corporate earnings and obscure ownership.