Exposing the madness wehind current economic thought

Friday, January 25, 2013

The Netherlands back corporate tax-planning

The Dutch government has publicly reassured international investors that it regards shifting profits to lower-tax jurisdictions as an acceptable corporate tax-planning strategy, and that unlike other countries it will not make any unilateral changes to taxation of international companies.

The promise was made in an open letter sent last week by the Dutch Finance Minister to the Dutch Parliament, which is currently debating the country's business tax policy. The letter explicitly concedes that setting up or shifting real economic activities to lower-taxed jurisdictions is a legitimate way of reducing taxes. Dutch tax laws, it said, have sufficient safeguards to protect against profit-shifting that has no real economic substance.

Related: Yahoo! Inc.'s Dutch offshore unit.