November 14, 2012

The Netherlands’ reputation as a tax haven is alive and well

Filed under: General by Orangemaster @ 11:20 am

Last year, The Guardian wrote a column on how the Netherlands is a tax haven for multinationals. In fact, if you Google ‘Netherlands’ and words like ‘tax avoidance’ or ‘tax haven’, you’ll see how gladly the country enables companies like Amazon, Google and Starbucks.

Back in 2002 Portugal got pissed when they calculated the insane amount of money they were losing to the Netherlands, while Dutch telly pointed out that “empty shell corporations pump 8,000 billion euro through the Netherlands”.

It’s bad enough the country’s 16.5 million residents have to deal with explaining themselves when it comes to prostitution and drugs, what we could do without is having to explain why our government wants to be the whore and pusher of corporations. Grab a hot beverage and read The central role of Dutch financing companies in tax avoidance strategies.

In the Netherlands, complex tax law constructions apparently allow companies to show losses in one or more countries to pay taxes at a lower rate in another. While most of it is probably legal, like many capitalist constructions, it screws billions of people over around the world. And the Netherlands thinks that’s ethically fine for some reason.

If you want more information, this is also a nice read from the Netherlands Comparative Law Association. The conclusion says a lot: “The Netherlands has a long-standing tradition of providing tools to address tax avoidance.”

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September 2, 2012

Dutch Rail abused privacy ‘anonymous’ transport card users, and more

Filed under: General by Branko Collin @ 2:27 pm

Dutch Rail is on a roll. Last Tuesday Webwereld reported that the state-owned monopolist has been sending spam to the users of the ‘anonymous’ version of the OV-chipkaart, the troubled Dutch transport card.

According to the tech news site, users of the anonymous card, with which you can pay for travel across modes and providers, had to give Dutch Rail their e-mail address in order to be able to travel with the company—presumably so that Dutch rail could differentiate between first and second class. Dutch Rail would then, however, abuse those addresses by inundating them with spam.

Earlier Dutch Rail was fined 125,000 euro by the Dutch privacy authority CBP for storing sensitive data about student travellers for too long.

It has not been a good week for Dutch Rail. Yesterday De Volkskrant reported that the company has been evading taxes by buying trains using a subsidiary in Ireland. The subsidiary would then leases those trains to the Dutch parent company. Train companies pay 9% in taxes in Ireland, but 25% in the Netherlands.

Par for the course for big business, you say? That may be true, but Dutch Rail is owned by the government. Basically, this is the example the Dutch state is setting to all tax payers. To make matters worse, Dutch Rail has a monopoly on all the juicy routes in the country. Other transport companies are allowed to run trains in the country, but only in areas that are not as profitable.

Suffice it to say that politicians were not happy, with for example PvdA (Labour) leader Diederik Samson calling Dutch Rails’ tactics ‘wrong’ and an example of ‘a lack of morals’. It is unclear to me whether politicians are upset because of Dutch Rails’ behaviour, or because their baby got caught red-handed.

(Photo by Flickr user UggBoy hearts UggGirl, some rights reserved)

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February 3, 2012

Dutch tax haven angers Portuguese

Filed under: General by Branko Collin @ 6:21 pm

A 2002 tax agreement between the Netherlands and Portugal has led 18 of the 20 largest Portuguese corporations to move their headquarters to the Netherlands.

This has led to 80% of all Portuguese investments being done in the Netherlands, De Pers reports.

The latest of these movers is Sociedade Francisco Manuel Dos Santos, owner of super market chain Pingo Doce (350 stores). The money drain in a time of crisis has led to calls for a boycott in Portugal.

The Portuguese government is now looking for ways to punish these companies for taking their tax payments elsewhere. De Pers has a tip based on what Brasil does: tax the tax flee-ers extra.

Dutch taxes for corporations are often low, and the Netherlands is the country with the most mutual tax agreements in the world.

The European Union has outlawed corporations that are not active in the country where they are legally located, but for some odd reason, the Dutch tax service sees no reason to check on companies that bring in a lot of money.

In 2009 TV show Zembla reported that these empty shell corporations pump 8,000 billion euro through the Netherlands, ten percent of all trade in the world.

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March 24, 2011

Unemployed air guitar star fined

Filed under: Music,Weird by Orangemaster @ 2:03 pm

Air guitar star Tremelo Theun is duking it out over money with the town of Hengelo, Overijssel. Bureaucrats have calculated that in addition to his unemployment benefits, he has earned about 3,760 euro that he didn’t declare, accounting for some 43 gigs since 2005.

He claims that he’s only had 32 gigs, that he once received 40 euro for costs and that with a few exceptions, he hasn’t made any real money. Bureaucrats have decided to multiply it all up and give him a fine for not declaring his earnings.

Twice world champion air guitar has had to lawyer up to fight the man.
Stay tuned (bad pun).

(Link: deweekkrant.nl)

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January 8, 2011

New tax law encourages both marriage and divorce

Filed under: General by Branko Collin @ 8:04 am

Since 2001 tax forms have had a checkbox that allowed two people living together to declare a ‘fiscal partnership’, a relationship just for tax purposes. It appears (I never looked it up before), that if you and somebody else declare a fiscal partnership you get certain tax breaks, such as mortgage interest deductions for the highest earner.

This year the law has changed. It is no longer enough to declare to the tax people that you and Bob are partners, you and Bob need to have some legal status to confirm this. A wedding certificate is good, as is a registered partnership (civil union) or a notarized ‘cohabitation agreement’. The latter is used for non-intimate relationships (think father-son) and sometimes for uncommon intimate relationships (think polyamorous). What also works is owning a house together or having children together. Couples who never got around to making it ‘official’ now have a decision to take.

Interestingly, married couples who are estranged may wish to explore the possibility of a divorce under the new tax regime, Elsevier reports. You see, this new fiscal partnership is obligatory. It is harder to get into, but you cannot opt out either. One reason for such a divorce could be if each partner owns a house, so that they both can get their own mortgage interest deductions.

Another way to become fiscal partners is to have a partner recognised by one’s pension fund.

The people that may be inconvenienced the most by this measure is those who refuse to divorce for religious reasons, even if they no longer live together—a situation called ‘separated from table and bed’ in Dutch, and legally recognized as such, just no longer by the tax people.

(Photo by Eunice Chang, some rights reserved)

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January 1, 2011

Winner new year’s lottery has to pay income tax twice

Filed under: Weird by Branko Collin @ 3:50 pm

The Dutch revenue service (Belastingdienst) has announced that the winner of the Staatsloterij Jackpot will have to pay income tax over these winnings for both 2010 and 2011.

Since 2001 the Dutch income tax is divided into three parts, a tax on wages, a tax on business interests (including dividends), and a tax on savings and investments. The latter category is calculated by taking the money you own on December 31 and the money you own on January 1 of that same year, and halving it. You then pay a one percent tax on the resulting average, the idea being that an average person should be able to realize a profit each year on their savings of investments of 4%, which is essentially a sort of income.

The tax service takes its own formulas very serious and figures that since the prize is won in the dying seconds of 2010, the winner also has to pay this tax on savings over 2010, even if they have not been able to collect and enjoy the prize.

Tax law professor Ruben Freudenthal has been quizzing his students for years on exactly this eventuality, and sides with the Belastingdienst. He told Financieel Dagblad: “Right after the draw the lottery ticket becomes valuable. You could sell it to somebody else.”

The 2010 lottery had a jackpot worth 27.5 million euro. The 2010 tax would amount to 137,500 euro.

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September 5, 2010

Temporary reduction of sales tax on renovations

Filed under: Architecture by Branko Collin @ 12:03 pm

Government ministers De Jager (Finance) and Middelkoop (Housing) have announced a temporary lowering of the sales tax on home make-overs from 19% to 6%.

The reduction is to take effect on October 1, 2010 and will last until July 1, 2011, Telegraaf reports. The care-taker government hopes that this will soften the blow of the crisis for the building sector.

Some of the rules for the lower tax are:

  • Only for houses of two years and older.
  • Only for labour costs.
  • Only for improvements that will raise the resale value of your house.

(Photo by Yola de Lusenet, some rights reserved)

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August 28, 2009

VAT on cleaning to be lowered

Filed under: General by Branko Collin @ 9:44 am

Next year, the sales tax on cleaning will be lowered, Treasury Minister Kees de Jager announced to parliament yesterday, according to Z24 (Dutch).

Nearly all services have a 19% VAT (Value Added Tax), but cleaning personnel will now join the ranks of hairdressers, painters and bicycle repair people at 6%. The measure is taken in the hope that more people will hire legal cleaning personnel (i.e. cleaning personnel that pay taxes over their income). In 2004, the government started a program that heavily subsidized legal cleaning personnel, so that their services came within the reach of ordinary households. The program (Dutch) was cancelled last year, because it did not have much of an effect.

(Photo of Banksy’s Cleaner by Dan Brady, some rights reserved)

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May 9, 2009

‘Serious’ quackery gets tax break

Filed under: General,Science by Branko Collin @ 12:30 pm

A judge in Haarlem ruled last month that acupuncturists who are also certified Doctors of Medicine qualify for a tax exemption that other acupuncturists must miss out on, reports NRC (Dutch). The ruling (Dutch) seems to suggest that jurisprudence and European law leave little room for the court to rule otherwise. Apparently, there is a European Union directive that says tax exemptions for healthcare can only apply to those who have had medical training.

The irony is that quacks who should know better—because they have had an education that should have emphasized critical thinking—are the ones that get rewarded by the state, which to me, you know, yuck.

(Photo of an acupuncture needle by Wikipedia User: Xhienne, some rights reserved.)

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June 27, 2008

Three-year-old already in tax system

Filed under: General,Weird by Orangemaster @ 8:42 am
Blue envelope

The Dutch tax office has a motto, which in English translates to “We can’t make it more pleasant, but we can make it easier”. And everytime they screw up – which has been a lot in 2008 so far – the media make fun of this ‘the road to tax hell is paved with good intentions’ slogan. Major computer problems have been their biggest worries, never mind that some staff are, well, incompetent.

The tax folks have sent a tax return to a three-year-old child, saying that they should provide them with their bank account number in order to get tax money back from 2004. The child was born in 2005, so you do the math.

This kind of mistake happens often. As a business, I recently waited for two separate returns of value added tax (small amounts, mind you) that I was owed. I got three letters telling me they all of a sudden could not find my bank details – which is rubbish, I assure you – and to fill in these three forms, all identical. The first return had two letters and the second one had one. I received the first return twice – they haven’t figured that out yet – and the second one once.

Here’s one (in Dutch) from March of a 6-year-old who was asked to cough up EUR 29,000.

(Link: waarmaarraar.nl)

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