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News : EU Economy Last Updated: Feb 28, 2012 - 8:23 AM


Tax Havens: The Netherlands, 20,000 mailbox companies, Facebook, Google and Bono - - Part 4
By Finfacts Team
Feb 27, 2012 - 9:51 AM

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President Obama speaks with Facebook's Mark Zuckerberg in Feb 2011, Google's Eric Schmidt is in the foreground

Tax Havens: The Netherlands competes with Ireland in offering corporate tax haven facilities and the US tech giants, Google and Facebook, use the Dutch tax rules to complement their drive to minimises taxes through chanelling of sales revenues from other countries into Ireland. About 20,000 mailbox companies are hosted in Amsterdam and prominent musicians such as Bono of U2 and Mick Jagger of the Rolling Stones avail of the system.

"Nearly one-third of all foreign profits reported by US corporations in 2003 came from just three small, low-tax countries: Bermuda, the Netherlands, and Ireland," a White House factsheet stated in 2009. Like the Queen in Shakespeare's 'Hamlet' who protested that '"The lady doth protest too much, methinks," the Dutch government hypocritically objected to the Netherlands being dubbed a tax haven and the White House deleted the line.

Bono, the well-known anti-poverty campaigner and frontman for Irish pop group U2, could have told the Dutch politicians that every cent of royalties from US radio plays of U2 CDs was going to the Netherlands to avoid having to pay a cent in tax, following a change in tax policy in Ireland.

he Wall Street Journal had also protested too much and like the Dutch had got the wrong end of the stick. It said in 2009: 'The Dutch corporate tax rate is 25.5% -- which isn't even all that low by current European standards. And the US is the largest foreign investor in that 'small, low-tax country,' according to the Dutch Embassy. Perhaps reducing American investment there and slamming the Netherlands as a tax haven is Mr. Obama's way of reaching out to friends and allies...And that investment is a two-way street -- the Netherlands is also the fourth-largest foreign investor in the US."

Like headline trade figures courtesy of the port of Rotterdam, one of the world's busiest, that flatter the Dutch, the foreign direct investment (FDI) data partly reflect activities by foreign companies in the Dutch tax haven. The Netherlands also hosts thousands of foreign financial vehicles.

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