The Netherlands Surprised, “Miffed,” by Obama’s Tax Haven “Slur”
The Dutch press is indignant at President Obama for including the Netherlands in a group of three countries which he calls the top three corporate tax havens.
The Dutch newspaper NRC Handelsblad calls it a “tax haven slur,” and the popular news and information web site for internationals, Expatica.com, carries the headline, “The Dutch government has been branded by US President Barack Obama as one of the world’s top three corporate tax havens.”
Radio Netherlands has the headlines, “Obama targets ‘tax haven’ Netherlands—US taxes disappear in Dutch-Irish-Bermuda triangle,” and continues,
The Netherlands is a corporate tax haven for US multinationals, and together with Ireland and Bermuda it is sheltering companies’ earnings from the American tax authorities, president Barack Obama said on Monday. As long as they keep their earnings overseas US companies are legally exempt from paying. Taxes only become due when the money is “repatriated” to the United States.
The Dutch embassy in Washington has also reacted with surprise and anger to Obama’s “qualification” of the Netherlands as a tax haven country and lumping it in with a group of low tax havens many corporations use to avoid paying U.S. taxes .
To be fair, Obama did not name any countries in his speech announcing a series of proposed policies intended to combat tax evasion by wealthy Americans and American corporations who use such tax havens to minimize or avoid paying U.S. taxes. However, the Treasury Department released a fact sheet that said “nearly one-third of all foreign profits reported by U.S. corporations in 2003 came from just three small, low-tax countries: Bermuda, the Netherlands and Ireland.”
According to Expatica.com:
The Dutch Finance Ministry has reacted with astonishment to the list presented by US President Barack Obama on Monday, which names the Netherlands as one of the world’s top three corporate tax havens, together with Bermuda and Ireland.
The Dutch embassy in Washington has contacted the American authorities to express its amazement.
A spokesperson said the Finance Ministry is working with its US colleagues to trace the origin of this misunderstanding, and to get it out of the way. The spokesperson added the Netherlands has “a very average tax level”.
In “White House miffs Dutch over tax havens,” The Hill quotes Dutch embassy spokesperson Floris van Hövell as saying that the Dutch corporate tax rate is 25.5 percent, “which puts us in the medium-tax rate category (and not in the low-tax category).”
More ominously, Van Hövell writes to The Hill: “The Netherlands is the 16th largest economy in the world and the 4th largest investor in the USA; the USA is the largest investor in the Netherlands.” And adds: “Given the tax-treaty between the U.S. and The Netherlands, the great number of bilateral tax treaties between the Netherlands and other countries and the absence of withholding taxes and royalties make the Netherlands an attractive location for foreign investors.”
With impressive figures such as these, I am sure the “misunderstanding” will be quickly resolved.
I am not aware of any immediate reaction from the other two members of the “Dutch-Irish-Bermuda triangle.”