US tech groups lobby Netherlands to resist EU tax reforms
A body representing 80 of the biggest US tech groups has called on the Netherlands to resist measures planned by the European Union to tackle corporate tax avoidance.
The Silicon Valley Tax Directors Group (SVTDG), which includes companies like Apple, Google, Microsoft, Cisco Systems and Facebook, sent a letter to Mark Rutte, Dutch prime minister, in May, following a visit by the prime minister to Silicon Valley.
Rutte had asked the association what steps the Netherlands could take to improve its tax climate.
On Monday the Financieele Dagblad newspaper published the contents of the letter where the group listed the tax incentives which benefit foreign firms:
Some features of the business tax regime have particularly contributed to the attractiveness and competitiveness of the Netherlands: (i) easy access to the Netherlands tax authorities; (ii) the possibility to obtain advance tax rulings to obtain legal certainty on a tax position; (iii) the favorable participation exemption regime; (iv) the wide tax treaty network; (v) the absence of a withholding tax on interest and royalties; (vi) the 30% tax ruling for expatriates; and (vii) the incentives for R&D related activities (innovation box and the WBSO (Wet Bevordering Speur- en Ontwikkelingswerk)).
SVTDG said that all of its cited features of the Netherlands business tax regime have been important drivers to attract US investors to the Netherlands. "The elimination of one or more of these features will adversely impact both existing US investments as well as the flow of new US investments into the Netherlands. We recommend that the Netherlands government carefully considers the pros and cons of any change to the current business tax regime."
The letter criticises the state aid investigations launched by the European Commission including the special tax deal given Starbucks in the Netherlands, where the Commission ordered the coffee chain to pay €30m back taxes to the Dutch government.
The SVTDG also slammed the European Commission proposals to have companies report financial information on a country by country basis as it "will hamper the business environment in the EU and will make the EU a less attractive place to invest in."
Also, the SVTDG said it is concerned that the public report of data will result in reputational damages for companies as a result of an incorrect interpretation of such data and a general lack of understanding of complex tax laws.
This is also the excuse used by Donald Trump in the US for not releasing his tax returns.
In effect the status quo is fine and there should be no transparency.
Pic on top: Mark Rutte, Dutch prime minister, with Neelie Kroes, former European commissioner, on a visit to Facebook's headquarters, Silicon Valley, Jan 2016.