On Monday 28 March MEPs in the Taxation Subcommittee (FISC) discussed with experts the national tax reforms implemented in the Netherlands to combat aggressive tax schemes. Among their recommendations, they suggest regulating Dutch tax advisors (see EUROPE 12918/17).
Although Anna Gunn, a partner at Gunn Tax Communication who teaches at a university, notes a “new ethical dimension in the new generation”, she called for national regulation of tax advisors. Jan van de Streek, professor of tax law at the University of Leiden, explained that these tax advisors are “reluctant to cooperate with the authorities” and that Dutch tax lawyers should therefore begin to be investigated. Regulation could, for example, be done through an oath or ethical rules.
Mr van de Streek also recommended swift action to tackle Dutch “paper box companies” (shell companies) and to address weaknesses around the Dutch withholding tax on outbound interest and royalty payments. He also suggested increasing transparency in Dutch tax rulings and abolishing the Dutch ‘patent box regime’.
However, both experts were keen to point out that the Netherlands had made efforts over the last 10 to 15 years in the area of taxation. Indeed, a succession of recent tax reforms have improved the situation in the country: - a withholding tax of 25.8% on outgoing interest and royalty payments to tax havens; - the elimination of transfer pricing mismatches leading to zero income; - the interest deduction being limited to 20% of profit before interest, taxes, depreciation and amortisation.
According to Rainer Prokisch, professor of tax law at Maastricht University, “the Netherlands is strongly committed to implementing EU directives and BEPS recommendations”, referring to the OECD’s strategy against base erosion and profit shifting. The Dutch authorities sometimes go even further than is necessary.
As Gilles Boyer (Renew Europe, France) recalled, the next challenge for the country will be the implementation of pillar II of the OECD agreement on the minimum taxation of companies (see EUROPE 12911/16). Francis Weyzig, Tax Programme Leader at the Central Planning Bureau, acknowledged that the directive “is a complex set of rules”, which will, among other things, “impact on the level playing field”. (Original version in French by Anne Damiani)