Measures taken by the government to combat tax evasion have produced notable results. The volume of cash flows from the Netherlands to countries with a low tax rate for 2 years decreased by 85%. If in 2019 38,6 billion euros were withdrawn to such countries, then in 2021 - only about 6 billion euros. Most of this reduction came from the outflow of interest and royalties: if in 2019 36,4 billion euros went to countries with low taxation for these purposes, then in 2021 - 1,5 billion euros. The government is confident that with the introduction of a tax on dividends in 2024, such cash flows will further decrease. Secretary of State for Finance Marnix van Rij announced this in a letter sent to the House of Representatives. The full text of the letter in Dutch can be read link.
Secretary of State Van Ridge noted that a range of measures taken by the government contributed to these achievements, the main of which was the introduction of a tax on interest and royalties. However, the fight against tax evasion is far from over, there are still many companies in the Netherlands that are essentially mailboxes for sending money to jurisdictions with low taxation. Therefore, the Cabinet of Ministers supports the proposals of the European Commission aimed at solving the problem of tax evasion, and plans to work with other countries to implement them.
From 2021, the Netherlands will levy withholding tax on interest and royalty withdrawals in a low tax jurisdiction. If the tax on such income is below 9% at the place of receipt, you will also have to pay to the budget of the Netherlands. These measures have made the Netherlands an unpopular country for P.O. box companies and the number of such companies has declined. From 2024, dividends withdrawn to such jurisdictions will also be subject to withholding tax.
In the near future, the government plans to focus on international cooperation in order to further combat tax evasion. An international agreement on the introduction of a minimum tax could become the most important instrument of such a struggle.
The Netherlands has its own list of countries with low taxation. The transfer of money to such jurisdictions is under special control. Find out more from our article.
Publication Date: 13.07.2022
