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I'm getting more and more frustrated by my own country's willingness to facilitate this. It just doesn't make any sense. From what I can tell it's all based on

• jdasdf 5y ago
  >From what I can tell it's all based on old-fashioned debunked economic theories in the same vain as "trickle-down-economy". Eliminating corporate tax is a fairly mainstream idea in economics, that is hamstrung by politics.
• sva_ 5y ago
  > It just doesn't make any sense. It makes a lot of sense considering the amounts of money that are flowing.
• dep_b 5y ago
  Why doesn't it make a lot of sense? It requires for companies to have some representation here, probably the have a board of directors and a board of directors is where a retired politician usually goes to after their political career. You wouldn't want to scare the people away that will give you a really well paid job for hardly any work at all, would you? We're still looking at the same people forming a new government after 10 years so the majority of Dutch people must absolutely love their achievements like the worst housing crisis since the Second World War or capitalism-presented-as-religion shit like this.
  • beckman466 5y ago
    > Why doesn't it make a lot of sense? It requires for companies to have some representation here, probably the have a board of directors and a board of directors is where a retired politician usually goes to after their political career. You wouldn't want to scare the people away that will give you a really well paid job for hardly any work at all, would you? For all the Dutchies here who want to learn exactly how this 'politician to corporate advisor pipeline' works, the VPRO docu 'Bankgeheimen van Joris Luyendijk' is great: https://www.vpro.nl/programmas/tegenlicht/kijk/afleveringen/2014-2015/bankgeheimen-joris-luyendijk.html https://www.vpro.nl/programmas/tegenlicht/kijk/afleveringen/...
  • williamdclt 5y ago
    Anybody wrote a book on trickle-up economy yet?
    • tinco 5y ago
      Yes, it's called "Capital in the Twenty-First Century" by Thomas Piketty.
    • beckman466 5y ago
      > Anybody wrote a book on trickle-up economy yet? Yep it's called 'The Communist Manifesto' by Karl Marx. [1] Further: 'Socialism: Utopian and Scientific' by Friedrich Engels [2] and 'Wage Labour and Capital' by Karl Marx [3] [1] https://www.marxists.org/archive/marx/works/1848/communist-manifesto/ https://www.marxists.org/archive/marx/works/1848/communist-m... [2] https://www.marxists.org/archive/marx/works/1880/soc-utop/index.htm https://www.marxists.org/archive/marx/works/1880/soc-utop/in... [3] https://www.marxists.org/archive/marx/works/1847/wage-labour/ https://www.marxists.org/archive/marx/works/1847/wage-labour...
    • Cthulhu_ 5y ago
      Just the anecdote that Ford paid his employees well and they spent more money.
• deleted 5y ago
  [deleted]
• beckman466 5y ago
  > There's a growing resistance to the Netherlands as a "Doorsluisland", and our current administration's political turmoil will hopefully provide the momentum for actual change - so hopefully things will change. I am really not holding my breath for this. I am glad to see the awareness of tax avoidance (through postbusfirmas, 'double Irish with a Dutch sandwich', etc.) growing, yet until we do something about the root cause, all 'systemic solutions' proposed by the bourgeois political system will still be like proposing to cure a heart attack with a band aid (the heart attack here being mass exploitation by global capitalism [1]: exacerbated by climate change and impending civilizational collapse). [1] Zak Cope, https://anti-imperialism.org/2012/09/18/understanding-and-changing-an-interview-with-zak-cope-author-of-divided-world-divided-class/ https://anti-imperialism.org/2012/09/18/understanding-and-ch...
  • emn13 5y ago
    Because profits are easily gamed (e.g. via loans and IP licenses), the double Irish with a dutch sandwich depended not only on shifting profits (the dutch sandwich part) but also on a low-tax EU state (the double irish part, though that also involved bermuda iirc). However, the loophole in Irish tax law was closed in 2015, and came fully into effect in 2020. But the underlying problem still exists - after all, profit shifting isn't some tax loophole; it's an intrinsic possibility given IP law and intangible assets. I'm skeptical this is ever going to disappear - because how are you going to tell a legitimate low-margin firm that merely has high costs in the form of IP licenses and loan interest from a shell company that's engineered those costs to cancel out any income, such that all profit accrues to whoever holds that IP or granted the loan? These tax avoidance techniques thus aren't really complex, and aren't trivial to solve - as long as you can shift profits into some jurisdiction with low or no taxes, but even more trivially simply by investing rather than making profits - resulting in lower-tax capital gains rather than income tax. https://en.wikipedia.org/wiki/Dutch_Sandwich https://en.wikipedia.org/wiki/Dutch_Sandwich https://www.nytimes.com/2017/11/06/world/apple-taxes-jersey.html https://www.nytimes.com/2017/11/06/world/apple-taxes-jersey.... But even without outright tax havens like Jersey, profit shifting is a problem, because it encourages states to do a race to the bottom. Personally, I think this game is lost; we should switch to taxing revenue and giving up on this profit-shifting whackamole; e.g. by much higher VATs instead.
• technicolorwhat 5y ago
  Im dutch too and im super frustrated about this. I don't care about paying taxes (I've done so for the last 20+ years) even if they go as high as 52%. But it really irritates me that: - other companies with this tax deals pay almost nothing - its unfair and destroys local competition i.e a Starbucks vs mom's coffee bar.
  • throwawayzRUU6f 5y ago
    Is the Netherlands in any way culpable in this - do they go the extra mile to help facilitate the evasion? My layman understanding of the tax evasion schemes is that there's nothing special about Ireland or the Netherlands. They're chosen due to other factors, like English proficiency, stable and well known legal framework - but the essence of the schemes could be done in nearly any western country.
    • Denvercoder9 5y ago
      One reason the Netherlands was used (in the past) was that royaltys and interest paid from the Netherlands didn't have a withholding tax, so you could freely move money from "high tax" countries to "low tax" countries. That tax was introduced in January 2021, so maybe there are other reasons now.
    • Marazan 5y ago
      No, there re absolutely special features of Netherlands and Ireland. Ireland specifically had a tax setup that allowed the creation of a "virtual" European Headquarters that was not in any tax jurisdiction that sales could be booked against.
      • martinald 5y ago
        Don't think that's accurate. All EU states allow a HQ like that. What Ireland did differently was allow companies to offset huge amounts of tax with complex IP transfer agreements to offshore jurisdiacations (Bermuda primarily) - called the Double Irish. And - more importantly - when this was "shut down" by the EU, there was another option called "Single Malt", which I believe is quasi shut down now or was meant to be in 2020. I'm not sure if there is a replacement but I imagine there is. You can read this all on the "Double Irish arrangement" on Wikipedia. What Ireland has done differently is show multinational companies that even if the EU/whoever puts pressure on one scheme they will try and come up with another one. Personally, I think the tax loss is unjustifiable - I think Apple's EU corp tax rate was something like 0.002% or something. I don't have a problem with Ireland's aggressive 12.5% tax rate per se, but setting up schemes which deprives European states of corp tax revenue and charging far under <1% is not cool IMO. It does seem that the US is finally fed up of this with the minimum corp tax proposals though.
• Vinnl 5y ago
  > our current administration's political turmoil will hopefully provide the momentum for actual change - so hopefully things will change. I don't think any of the four largest parties made a particularly big deal out of this, so I wouldn't hold my breath.
• Cthulhu_ 5y ago
  I think the Fear is that if the loophole is closed, the businesses will move elsewhere, taking an X amount of jobs with them - from which the government earns some income taxes. They take the crumbs instead of nothing, because there's no chance they get the cake. It may take EU wide legislation to fix, but even that is no guarantee because companies may just opt to not operate in the EU.
  • rambambram 5y ago
    Correct me if I'm wrong, but one of the things I vividly remember from law school is that the European Union leaves taxation to the member states.
  • FriedrichN 5y ago
    > taking an X amount of jobs with them All three? These shell companies are often just a post address, sometimes an empty office with a plant (and someone to water the plant every week). The excuse is always that if we won't do it, someone else will and that we need international legislation. While that is true, someone needs to kick it off. And I don't want the crumbs, they can stick those crumbs where the sun don't shine.
    • candiodari 5y ago
      Actually Ireland demands that some percentage of workforce plus some percentage of revenue is in Ireland. So no these are sometimes very large offices, and a bunch of actual business is also routed through these offices. Unless you mean in the Netherlands, yes, there you can have a post office/lawyer office, something along those lines.
      • markvdb 5y ago
        Ireland at least until recently didn't even require Irish companies to be administered from Ireland. It was also super laissez-fair on arm's length principles for valuing services provided between connected entities. [0] https://en.wikipedia.org/wiki/Double_Irish_arrangement#Concept_and_origin_(1991) https://en.wikipedia.org/wiki/Double_Irish_arrangement#Conce...
• f6v 5y ago
  Which movie was that when someone wanted to arrest a guy in Curaçao and the local police was like: "No no! Can't do it front of the bank! It will scare off other clients"?
  • beckman466 5y ago
    https://www.youtube.com/watch?v=w1fiM1NkpeM https://www.youtube.com/watch?v=w1fiM1NkpeM ? edit: ah I misread your comment. I googled 'bbc documentary cayman islands bank security guard' to try to find a documentary I saw a while ago. I found it, it's called 'Britain's Trillion Pound Island: Inside Cayman' which follows a guy who is trying to go inside a building in the Caymans that houses these infamous letterbox companies. Jacques Peretti standing outside Ugland house: "Obama got it wrong: there are nearly 20,000 companies in there [not 12,000]": https://www.youtube.com/watch?v=889jVIIz2L4&t=1342s https://www.youtube.com/watch?v=889jVIIz2L4&t=1342s
  • bbojan 5y ago
    I don't think it was a movie, but Narcos the series.
    • MomoXenosaga 5y ago
      Amusingly the Netherlands is a narco state too but unlike Mexico it's more civilized.
      • f6v 5y ago
        They had their fun back in the day when they smuggled opium into China.
    • f6v 5y ago
      Right, that's it.
• DyslexicAtheist 5y ago
  The US has ensured it gets its own share of the pie with jurisdictions like Nevada, New Mexico, Arizona and Delaware. The OECD offshore grey/black list is just a farce that ensured dark money moved from the traditional "Hollywood-jurisdictions" like Switzerland, Vanuatu and Cayman to places that are considered "clean". Here is an excerpt from Treasure Islands: Tax Havens and the Men Who Stole the World[1] > American corporations could cook up a version of what was known as a “Dutch Sandwich”—set up an offshore finance subsidiary in the Netherlands Antilles, then use it to issue tax-free Eurobonds and send the proceeds up to the American parent. The United States could argue that it did not have to tax this income from the Antilles, under the rules of its tax treaty with this former Dutch colony via its postcolonial relationship with the Netherlands. The U.S. Internal Revenue Service could easily have decided that the Dutch Sandwich was a sham and taxed the income. But it looked the other way. “These were Eurobonds, bearer bonds, which were virtually impossible to tax,” explained Michael J. McIntyre, a top U.S. expert on international tax, who was one of very few people in the United States to have opposed this at the time. “You British people were quite happy about (the tax-free, secretive Eurobond markets). And we wanted in. We wanted to attract the hot money too.” > The United States sells financial secrecy not just at the federal level but at the state level too. Delaware is the biggest state provider of offshore corporate secrecy, but Nevada and Wyoming are the most opaque: They allow bearer shares, a vehicle of choice for mobsters and drugs smugglers, and they are particularly lax on allowing company directors and other officers to be named, hiding the identities of the real owners. Nevada does not share tax or incorporation information with the federal government and does not require a corporation to report where it does business. The IRS has no way of knowing whether a Nevada corporation has filed a federal tax return. Arkansas, Oklahoma, and Oregon are also routinely used for fraud by eastern Europeans and Russians, and, as noted, Texas and Florida are havens for illicit Latin American wealth. In the 1990s, the U.S. government gave millions in aid to help the former Soviet Union countries improve the security at their nuclear power plants. Much of it went missing. When the U.S. Department of Justice went looking for the money, investigators finally tracked it to anonymous shell companies in Pennsylvania and Delaware. Most cases involving financial market manipulations that the FBI has studied have involved U.S. shell companies from these states. The notorious “merchant of death” Viktor Bout, inspiration for the character played by Nicholas Cage in the Hollywood film Lord of War, alleged arms runner to the Taliban and other murderous organizations around the globe, operated through businesses in Texas, Delaware, and Florida. [1] source: https://en.wikipedia.org/wiki/Treasure_Islands:_Tax_Havens_and_the_Men_Who_Stole_the_World https://en.wikipedia.org/wiki/Treasure_Islands:_Tax_Havens_a...
• dalbasal 5y ago
  It's a mistake to think of it as based on ideas or economic theory, debunked or otherwise. "Trickle-down-economy" is a marketing term, intended for rhetoric. Tax policies, and other corporate friendly loophole machines are all about detail. At the detail level, both rhetorical slogans and technical theories have no meaning. Any given legislation can only be understood as accounting spreadsheets and scenario plans. There's no way to "narrate" it. One side thinks in terms of objects that have independent moral implications, like shell companies. The other thinks in terms of objects that are a collection of accounting details, like pass-through entities. There's an old business adage: "you name the price, I'll name the terms." In a startup context, that could mean investing in a company at valuation X, but with terms (eg liquidations preferences, performance goals, etc.) that make a mockery of X as a valuation. Many a vein founder has been scheisted this way. Proudly boasting their impressive, $X valuation and paper-wealth, while giving away the farm. In corporate law and tax codes, one side has been consistently been winning this game.
• smitty1e 5y ago
  Royal Dutch Shell, indeed. We claim to want our systems to operate like chess, but they tend toward poker. The global tendency toward populism is at least partially driven by the gut feeling that there are two systems: chess for thee, and poker for me.
• speleding 5y ago
  I'm also Dutch, but I'm mainly frustrated that the press does a very poor job of explaining what is going on. Uber has its corporate head quarters for the EU in Amsterdam. For a company the size of Uber to have 50 different entities is not particularly special, you will find several other multinationals there with the same number. It makes sense to have one for each jurisdiction they operate in, for example. The term "shell companies" seems to imply something nefarious, and that may very well be the case, but in itself having 50 entities in The Netherlands is not really a sign of that. It's also important to point out that they do not choose The Netherlands for low corporate tax rates, they are not the lowest in the EU by far, but because of "tax rulings". Those are agreements they can make with the tax authorities that ascertain them how much tax they will pay this year as long as revenue, costs, etc, stay within a certain bandwidth. In the US it can take over a year for them to get any certainty on what their tax bill would be for the previous year, and shareholders hate that uncertainty. No one thinks it's a good idea to compete in a "race to the bottom" of attractive tax laws, but as far as I'm concerned competing on better service is fair game. Many politicians screaming at The Netherlands tend to conveniently forget the part where their own country just delivers very poor service tax-wise.
  • beckman466 5y ago
    > The term "shell companies" seems to imply something nefarious Well considering they are mostly used by big corporations/capitalist firms to avoid all kinds of responsibilities to society, I seriously question your lack of critique here. Maybe the way to frame this is that tax avoidance (or in corporate speak: 'tax planning') has become horribly normalized by the media. I think most of the working class have no idea of the institutional terrorism that is going on on a daily basis, against their own interests. They are gaslit with propaganda day in day out (I'm looking at you Murdoch, yet also liberal news gives terrible systemic critiques - so you could argue that's actually worse since they claim to be a fair and objective news source). Your arguments speak much too kindly about these firms (and the bourgeois government institutions that supposedly 'democratically' govern them), who are oh so happy to create as many 'externalities' as possible. > It's also important to point out that they do not choose The Netherlands for low corporate tax rates, they are not the lowest in the EU by far, but because of "tax rulings". Those are agreements they can make with the tax authorities that ascertain them how much tax they will pay this year as long as revenue, costs, etc, stay within a certain bandwidth. The way you're framing it, it sounds like you think this makes it fairer? The problem remains: multinational capitalist firms/corporations are leeches on the working class and are not adequately contributing back to society.
• whywhywhywhy 5y ago
  How would you even prevent it? I'm more tired of being told "Billionaires and megacorps will pay for X" when we know they never will. Taxes are only for the working and middle class.
  • emn13 5y ago
    The real fix is taxing revenue, not profit. The 50 shell companies here are surely useful to Uber, but the core problem here is that Uber is at least on paper non profitable, and therefore doesn't owe taxes. The fact that it plays some kind of shell game is likely due to the fact that the concept of profit depends on how the boundaries are drawn, and it wants to ensure that it controls those boundaries, such that no part pays any taxes. Overall however, in the current system used pretty much worldwide (I believe?) it's reasonable for a loss-making company like Uber to not pay any taxes. The problem is in the approach, not really in the ridiculous shell companies.
    • JI00912 5y ago
      If you make 100$ and spend 150$, you have revenue of 100$, no profit and a debt of 50$. So you'd have to pay taxes on the 100$ from your -50$.
      • emn13 5y ago
        Assuming you (or the corporation) have no money - yes. That's exactly how it works for individuals, and how it should work for corporations too; they would need to take a loan (or dip into capital) to cover the 50$ loss, and would then similarly need to cover whatever tax was on revenue. Obviously taxes on revenue would not need to be as high as on profit to generate the same tax income, so for most businesses this is fine - but low margin businesses would need to raise prices slightly. On the other hand, if large corporations actually payed their share, income taxes would likely be lower, and it would be easier for smaller competitors to compete with larger corporations that can afford to profit-shift. It would also be hell of a lot simpler, because all those crazy shell company incentives go away, and it's also much clearer what's deductible (not a whole lot).
• cal5k 5y ago
  > From what I can tell it's all based on old-fashioned debunked economic theories in the same vain as "trickle-down-economy". As an aside, I find this (popular) sentiment quite amusing - what, exactly, is "trickle-down economics" and who can we credit for doing such an apparently thorough job of authoritatively debunking it?
  • benwad 5y ago
    I think "trickle-down economics" is usually a synonym for the Chicago School, promoted by Milton Friedman and exported (often forcefully) by the US government. As for who's responsible for 'debunking' it, Thomas Piketty is the name I'd usually associate with popularising the skepticism towards the Chicago School.
    • cal5k 5y ago
      No Friedman acolyte that I'm aware of would actually endorse wealth transfers to the rich in the hopes that it would "trickle down" to everyone else. It's a simplistic caricature of a broad system of thinking that seeks to maximize individual economic freedom and broadly minimize taxation and unnecessary regulation.
      • benwad 5y ago
        Transferring publicly-owned assets to privately-owned companies is exactly what Friedman proposed to the various South American dictators he advised.
• krageon 5y ago
  > It just doesn't make any sense The Netherlands' primary business model is facilitating tax evasion (and thereby stimulating an influx of shell corporations here that pay a nominal amount of money for a "tax deal"). I'm genuinely confused why you think it doesn't make sense in this specific case (or in general?).
  • jorvi 5y ago
    The Netherlands' primary business model is having a high value service economy. The tax thing only amounts to a few percent points of the entire GDP. That doesn't make the tax trickery less of an issue, but do not make it out as if that's our raison d'être.