The Netherlands has emerged as the new tax haven for corporations and rock stars, according to news reports.
Apart from the Rolling Stones and U2 – Bono loves to preach but he hates paying tax – there's Coca-Cola, Ikea, Nike, gucci and Sun Microsystems.
Escape from the tax man is done through so-called "mailbox companies", basically corporate shells set up by foreign companies and the mega-rich who use them to relieve taxes on royalties, dividends and interest payments.
The tax shelters have benefits but those benefits don't outweigh the negative consequences for other countries, says a report by the Dutch non-profit research and advisory bureau SOMO (Centre for Research on Multinational Corporations).
"It
affects both the capacity of developing country governments to supply essential services to their populations and the capacity of developed country governments to provide finance for development in the form of debt relief and official development aid. Hence, the Dutch tax policy is clearly inconsistent with the policy on Official Development Assistance (ODA) and the associated high contribution towards financing the achievement of the Millennium
Development Goals (MDGs).
"Furthermore, it has a substantial negative impact through the resulting shift of the tax burden to other sources of income such as labour, and the reduced possibilities for smaller companies to compete with multinational corporations. The tax haven features of the Netherlands also facilitate money laundering and attract companies with a dubious reputation."
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