08/06/21

NETHERLANDS: Jurisdiction in favour of G7 plan to end tax havens.

As published on insidewalessport.co.uk, Monday 7 June, 2021.

The Interim Cabinet expressed support for the Group of Seven major economies’ plan to introduce a worldwide minimum corporate tax rate of 15 percent. This initiative was launched as an effort to reduce tax evasion across the world.

The plan would force tech giants such as Apple, Facebook, Google and Amazon to pay taxes in the countries where they generate their revenue. Currently, they only have to pay taxes in the countries where they are located where tax evasion is possible.

The strategy would also eliminate the so-called “race to the bottom” in which countries compete to keep their tax rates as low as possible to attract businesses. The agreement was signed in London on Saturday by the finance ministers of the Group of Seven, Canada, France, Germany, Italy, Japan, the United States and the United Kingdom.

The outgoing cabinet expressed its satisfaction over the deal: “The Netherlands supports these schemes. This way we can effectively tackle tax evasion,” wrote state finance secretary Hans Willbrew on Twitter.

Villebrew also said that he is working to implement the agreement in the EU as soon as possible. All G7 countries already have a corporate tax rate of 15 percent, but some countries in the European Union are below this level. Corporate tax rates are just 12.5% ​​in Ireland and Cyprus, and just 9% in Hungary.

The Netherlands is also known as a tax haven for large companies. Large companies such as Netflix and the four largest tobacco companies British American Tobacco, Philip Morris, Japan Tobacco and Imperial Brand used shell companies for tax evasion in the Netherlands.

Earlier this week, Philbrew told De Nieuws BV that if companies start paying more taxes, the average citizen could end up with less.