Dutch review finds 72 errors in recent tax deals

AMSTERDAM, Feb 19, (RTRS): The Dutch Finance Ministry said on Monday a review of tax deals offered to international companies found 72 mistakes, including five cases in which decisions were either wrong or likely wrong, and tax policies should be revised “in some ways”.

The Dutch government is carrying out modest reforms to its tax policies, which contain provisions seen as lax by critics but as necessary by The Hague to attract foreign business.

The policies include so-called advance rulings, which can include arrangements wherein a tax authority approves in advance prices one branch of a company charges another when they do business. Multinationals value the certainty advance tax rulings bring, while critics say they are often used to shift profits into zero tax jurisdictions.

Tax campaigners say that the Netherlands and Luxembourg specifically rubber-stamp such deals in order to attract investment and jobs. In addition, such deals are also often not available to smaller or less sophisticated firms.

“The results of this review...give cause to revise in some ways giving advance rulings,” Deputy Finance Minister Menno Snel said in a letter to Parliament.

“However, the Cabinet remains a steadfast advocate for giving clarity to taxpayers at an early stage.”

The ministry began reviewing all deals offered to international companies in the 2012-2016 period in November, after being stung by a leak that showed it failed to follow its own vetting procedures in a 2008 case involving Procter & Gamble , though it said that deal did not contain errors of substance.