The reason Amsterdam took the spot was it has been historically very "tax friendly" to corporations, shall we say, to the point where most foreign conglomerates and even the French Airbus and the Swedish IKEA have set up their holding companies there.
I'm not Dutch, but a near zero-tax policy (for the big players), with a stable low-corruption government, easy bureaucracy, EU and NATO member, a huge harbor, top infrastructure plus a highly skilled workforce and easy immigration policy is bound to attract every company out there.
That's not my life anymore and I don't actually know the Schiphol end myself, but that's what it's like.
Eurostar is my clear preference if you can get a straight through train without changing in Brussels. Departs St Pancras at 5:11pm. Travel Standard Premier so you get dinner at your seat at 5:15pm. 4h trip, no changes. Arrive at Ams Central Station at 10:20pm. Arrive at home/hotel by 10:40pm. Slower, but extremely comfortable. And you can work productively all the way.
For travelling in the morning, the 7:25am flight from LCY is good. The smaller airport is much quicker to get through than LHR or LGW.
For the return trip from Amsterdam to London, you do lose a lot of time at Schiphol airport. Flying into LCY makes up for it though, especially if you work in Canary Wharf. I'd typically take 20 mins from plane landing to sitting at my desk.
There's no such zero-tax policy. There simply is the liquidatieverliesregeling, which allows you to subtract not-yet-subtracted losses from investments overseas from the profits in the HQ.
Shell is the common example. It has an HQ in the Netherlands, and many overseas investments. e.g. hundreds of places where it drills for oil in many different jurisdictions.
Suppose 9 of these of these do not find profitable oil and thus make a loss of $10 each, and 1 of these does find oil and makes a profit of $100. The total profit for Shell is $100-90 = $10. Corporate taxes only tax profits, that's true around the world.
However, because the 10 Shell entities are drilling for oil in 10 different jurisdictions, the one profitable company cannot deduct losses from other jurisdictions from its profits. Therefore the $100 is taxed at say 20%, so the income is $80. And the losses are still $90. So overal, worldwide Shell just made a $10 loss due to taxes, despite making a profit.
The Netherlands' tax regime simply states that if you have an HQ, you can deduct all those losses which you haven't been able to deduct before, from the profits of the HQ. That's in principle a fair form of taxation. Second, it doesn't benefit the Netherlands tax-wise, because it reduces the tax income in the Netherlands, while profits overseas are still taxed overseas and generate income for those local jurisdictions.
This idea that therefore the Netherlands has a zero-tax policy that's screwing other countries is nonsense. There are many other examples and discussions you can have about Dutch taxes creating issues overseas (the Netherlands is certainly not perfect), but the tax regime for corps with a legal HQ in the Netherlands isn't one of them.
Sampling from https://www.nytimes.com/2018/09/20/business/netherlands-tax-...:
Of Nike: “ The sports apparel maker used a common, legal method of shifting profits to a tax haven, according to the consortium’s research. First, it allocated ownership of its “swoosh” trademark and other intellectual property to a subsidiary in Bermuda, which has no corporate income tax. Then, its subsidiary in Hilversum paid royalties for the use of the trademarks to the Bermuda unit. The royalties counted as business expenses and in that way avoided taxation in the Netherlands.”
And more generally: “ The Netherlands long justified its laws by arguing that they encouraged multinational companies to establish their headquarters in the country, creating jobs and investment.
More recently, however, legal thinking and public opinion have turned.
Officials in Brussels have accused the Netherlands of violating the European Union’s rules by helping Ikea to shear its tax bill. And polls show that Dutch voters have become increasingly angry at what they see as special privileges for wealthy corporations paying little or nothing — middle-class residents of the Netherlands, by contrast, can easily pay more than half their income in taxes.”
The reason is pretty clear. There's usually no independent measure of value (because it's not like Apple/Nike/etc are licensing their brand to third parties) so it's very difficult for a tax authority to dispute the company's valuation concocted out of thin air.
On the other hand, IP does cost money to develop, and it's often developed in one country but used in another. Presumably you wouldn't want to just remove IP tax-deductibility outright.
It's such an absurdly exploitable loophole, though, that I'm beginning to take the view that intra-group licensing arrangements should basically be ignored for tax deductibility purposes. Under my revised framework, companies can still deduct consolidated IP costs, but only at the HQ level (i.e. not in between subsidiary groups).
The end result would be Google Australia paying slightly more tax in Australia, but Google USA pays slightly less tax in the USA.
I really don't see that as a problem, given how rapacious these companies have been at exploiting the existing arrangements.
Interested to know if others have thoughts on this arrangement.
Not sure why you posted this, it has nothing to do with the favourable tax-regime for placing your HQ in the Netherlands which I specifically spoke about (liquidatieverliesregeling).
The royalties you mention have nothing to do with whether you have your HQ in the Netherlands. Second, it's the American company (Nike) that ultimately profits, due to a Bermuda company which actually has a zero corporate tax rate policy, not the Netherlands. The US can change its laws to tax the IP created there. All that happens for the Netherlands is that it's missing out on tax income that'd otherwise be generated locally here. We shouldn't pretend as if there's this one country that unilaterally decides and profits. Instead, these structures are based on mutual tax treaties, and in this case the US agreed, the US company Nike profits, and the Netherlands is missing out on tax revenue.
Second, that situation has already been rectified due to the new tax on royalties in the Netherlands.
I haven't seen any change in public opinion, it's always stated that large companies pay too little, small companies and employees pay too much. And that's pretty much true in all countries.
Fact is the Netherlands ranks among the highest in the EU for corporate taxes as a percentage of GDP: https://data.oecd.org/tax/tax-on-corporate-profits.htm
It's certainly not perfect here but I find the discussions are often misguided and lacking nuance. I also find that many journalists just don't get it right.
This is like the EU version of a Californian saying those dastardly Texans should be ashamed of their low taxes when BigCo announces they're moving to Texas.
It's a backhanded way of implying that it's not a good thing or that they should be ashamed or whatever.
Simply look at the corporate taxes as a percentage of Dutch GDP, it's among the highest in all of Europe: https://data.oecd.org/tax/tax-on-corporate-profits.htm
The Netherlands' tax system isn't perfect and there are certainly abuses, by the way. But I do want to add some nuance here.
I won't go into non-corporate taxes because I assume that's not what is being talked about here, but the Netherlands also ranks among the highest in the world in total taxes as a percentage of GDP.
In particular, companies can get so called "tax rulings" that allow them to predict exactly how much their tax bill will be, as long as their revenue, depreciations, etc, stay within an agreed upon range.
In many other countries it can take over a year to get a final total on your tax return. This causes headaches for multinationals who need to keep a reserve somewhere to account for the worst possible outcome of that tax bill. I would say that attracting multinationals with better service is fair game.
> Why they don't want to hear this ? Isn't it something the Dutch people should be very proud of ?
Why would anyone be proud of living in a tax haven? The whole point of being one is to profit a little off of a race to the bottom by undermining your neighbor's tax system by helping their wealthy be greedier.
I fail to understand what is wrong with this. What is wrong in people keeping more of their wealth to themselves ? Heck I am not even very rich but would love to live in a country that does not tax and on top will be extremely proud to be the citizen.
If there is something wrong in lower taxes are you implying thay countries with 100% taxes (where you turn up everything you have to your government) would be somehow morally superior or something to be proud of ?
> I fail to understand what is wrong with this. What is wrong in people keeping more of their wealth to themselves ?
It's selfish and antisocial. These are pretty basic concepts, and I'm having a little trouble believing they could be unknown or hard to understand. I don't even think libertarian tracts are usually that extreme.
> If there is something wrong in lower taxes are you implying thay countries with 100% taxes (where you turn up everything you have to your government) would be somehow morally superior or something to be proud of ?
No, of course not. You seem to be conceiving things in very black and white way, which is almost never correct (e.g. there's a lot of space between 0% and 100%, rejecting 0% in no way implies a choice of 100%).
> which is almost never correct
I am not seeing either any black or white. You on other hand just called a lot of people antisocial. So people who move out of California to Nevada because they dont want to pay 10% (or 16%) state tax are antisocial ? Seems pretty black and white assertion to me.
Because greed leads people to harm and neglect others for gain? This is an extremely basic idea, and if it's still not clear to you, maybe you could watch a movie like Wall Street (https://www.imdb.com/title/tt0094291/) and pay close attention to the Blue Star employees, how Gordon Gekko is willing to harm them, and how little he cares about it. It's probably not the best movie to teach this, but at least it's for adults and it came to mind easily. It feels like it would take more time than I'm willing to spend to explain it.
> Almost all the better societies, more livable societies are where people are free to pursue their own self interest (aka greed or profits). The one like North Korea where government beats people to be "non-greedy" appear to be pretty violent places to live.
It would probably do you well to just completely forget about North Korea. I'm no fan of it at all, but what you wrote reads like a rough rehash of some melodramatic libertarian propaganda meme (e.g. make and extreme idea like "greed is good" by placing it in opposition to a villain).
>> which is almost never correct
> I am not seeing either any black or white. You on other hand just called a lot of people antisocial. So people who move out of California to Nevada because they dont want to pay 10% (or 16%) state tax are antisocial ? Seems pretty black and white assertion to me.
You totally are seeing things in back and white (or more precisely, pairs of radical extremes). However, I'm not really willing to spend any more effort trying to hand hold you away from that.
Also, the free association argumentation thing is obnoxious. We're talking about tax havens (and a weird assertion that they should be pride-inducing), what do state resident income tax rates have to do with that? Those are very different things.
I accept a job offer than pays me more, that is greed but how does that cause anyone harm or cause neglect ? I think you are mistaking lack of compassion on charity to be greed. Which societies or successful people are not greedy in your case ?
> It's probably not the best movie to teach this, but at least it's for adults and it came to mind easily.
I do not take moral lessons from movies. There might be bad people everywhere but greed has very little to do with it.
> rough rehash of some melodramatic libertarian propaganda meme
This is just flamewar. Extreme ideas are a good way to compare principles. Once you agree that stealing is bad, it is irrelevant how much stealing is bad.
The example of North Korea has nothing to do propaganda meme. The observation, real observation is that people are giving arm and leg to move to areas with lower taxes, these areas also have reasonably well quality of life.
> We're talking about tax havens (and a weird assertion that they should be pride-inducing),
Using our logic (or rather lack of) "haven" is a socialist propaganda term. Some political entities have figured out that by having a "BETTER" tax regime they can invite more wealth and wealthy. Singapore an Hong Kong are such great examples. You in one stroke are calling them "greedy".
Not only is factually wrong, it is also pretty self righteous of you.
We just had our cabinet fall over a huge scandal in which the tax authority incorrectly reclaimed thousands of euro's from quite vulnerable people and ruined lives. But also wanted to cut dividend tax for ~<billion euro/year. Worst thing is, the same parties that are responsible for this mess are likely to be reelected.
Somehow half the general public cheers for the left opposition parties that want to remove these tax breaks because "it's not fair Apple is paying so little". But anyone with any economical sense understands that removing these tax breaks means Apple (and the rest) will leave Amsterdam. They have no significant operations there, just a postbox for the low taxes. The end result is that Dutch citizens will have to pay more tax.
The government knows this very well, but they can't publicly be very vocal about it because being a tax haven isn't very friendly to other countries that are missing out on taxes because of it.
So long story short: If you're Dutch stop complaining, you're saving tax. If you're any other European: you have every right to point out the Netherlands as a tax haven.
And okay, Apple offers something unique, by why the fuck should I be subsidising a coffee company? They do nothing a random mom-and-pop business can't do, they add nothing to the local economy whatsoever.
Why should forcibly taking money from other people have earned be a good thing ? A perhaps better idea would be just to ban Starbucks from the country and let government run a monopolized coffee shop. That might be a great achievement no ?
From what I can see the government must strive to achieve as much as possible while taking as little as possible from anyone else. Taxation is theft but has no real alternative but being cognizant of that underlying philosophy would help people find a moral compass.
What is strange about the Dutch tax haven situation is that Apple (as just one example) isn't really using any local services, they only have a PO box. So they're not paying to get something, they're only paying because everywhere else they would have to pay more. In effect they're robbing the US because they are using public services there, while not paying the tax that is normal for it.
But as a Dutch taxpayer: Thanks Apple!
In most of those cases, tax need not be the only way to pay for those services. Government in many cases uses coercion to monopolize some of the markets (roads, NHS etc.) which makes it necessary to tax people. But even if I agree with your basic premise then what % of tax revenue actually goes into funding something that is public good, at least in USA around 40% of it is pure waste.
> So they're not paying to get something, they're only paying because everywhere else they would have to pay more. In effect they're robbing the US because they are using public services there, while not paying the tax that is normal for it.
> they're robbing the US
Not true. Apple is keeping its own money to itself using perfectly legal mechanism. This is not very different from claiming spouse or child as an exemption for an individual.
> because they are using public services there
Paying taxes have absolutely nothing to with which services you use. US is happy to tax American citizens who do not even live in USA nor have anything to do with USA. NY state taxes folks who specifically refuse to stay or work in NY and yet work for NY based employers.
Tax is a classic redistribution mechanism, government collects whatever it can, spends (or supposed to spend on) whoever needs it. It has nothing absolutely nothing to do with what services one uses.
> But as a Dutch taxpayer: Thanks Apple!
That is something we can agree on and Thanks Denmark for making it happen. More money in the hands of US government is nothing but trouble for Americans and thrid world countris where they drop bombs.
The costs of setting up new offices would dwarf any nominal tax saving.
This isn't 'populist' it's pragmatic. Countries cost a lot to run, and if someone is renting space from you they should be paying their way - not getting an incredibly cheap ride because you happen to have some rooms (spaces) you want to fill.
The tax routes don’t take anything from any country.
Corporate tax is 25% here. But they use other routes to pay less than that.
These sort of things probably fall under the category of fraud, wrongdoings, crime etc. any ways and I do not imply that you should be proud of these things. But having a lower tax rates etc. clearly is bringing in more business and more trade to Amsterdam and non of this is due to a scandal or fraud. You can definitely be proud of that achievement while denouncing the frauds and scandals committed by the tax authorities.
No they did not. The scandal is about the reclaiming incorrectly and government institutions not doing anything for these people to have any recourse etc. This is the story: https://edition.cnn.com/2021/01/15/europe/netherlands-govern...
> But having a lower tax rates etc. clearly is bringing in more business and more trade to Amsterdam and non of this is due to a scandal or fraud
Not really, these businesses are just post boxes with no to only a few employees to be able to claim Dutch residence for tax evasion purposes or to take advantage of the lower tax rate.
> You can definitely be proud of that achievement
It's not my achievement. It's hard to be proud of a scheme that deprives my own and other countries of tax income that could be used for the greater good.
The megacorp tax practices are well publicized and scandalous. I think countries should focus on fostering innovation rather instead of racing to the bottom in taxes in a zero-sum game of getting companies to move HQs
Google "Nederland belastingparadijs" and you'll find a lot of Dutch articles about it.
https://www.apple.com/newsroom/2020/11/apples-cork-campus-ce...
If that requires me paying a bit more tax, fine by me.
I wonder if the "Double Dutch Irish sandwich" or whatever it's called will get a British tinge soon enough.
I voted Remain FWIW. That seems an awfully long time ago.
Tax evasion/avoidance was indeed one of the primary motivations for Brexit. But that only works when you have a stable financial system - and haven't just destroyed a significant part of your balance of payments by crippling both exporters and service providers.
And then the governor of the BoE tells everyone to consider negative interest rates - which is a superb way to persuade speculators to sell the pound and make imports even more expensive.
It'a almost as if they're deliberately trying to crash the currency.
No it wasn't, it was barely mentioned. A few libertarian Tories would have liked to lower tax rates but:
1. Countries having different tax rates is not "tax evasion" or "avoidance". By any definition that's clearly propaganda.
2. Lockdowns put paid to that idea.
3. The idea of turning Britain into Singapore never gained much traction within the wider Conservative party.
The what now? Airbus, formerly EADS, is the result of mergers of French, German and Spanish aeronautics companies, and the government owned stock ( iirc ~30% is roughly split between them). HQ in the Netherlands makes sense the same way that entity HQs are in different countries - Germant for helicopters, France for civilian airplanes, Spain for military, with of course the added benefit of taxes.
There are plenty of mergers that end up registered in the NL, and plenty of multinationals that do so as well.