Dutch Finance Minister Jeroen Dijsselbloem indicated that the Netherlands will be at the forefront of efforts to combat multinational tax avoidance.
In a passing reference to his country’s current struggles with the European Commission (EC) over tax rulings, Dijsselbloem said, “If the Netherlands has been part of the problem in the past, we want to be part of the solution from now on.”
The Netherlands is appealing an EC decision that a Dutch transfer pricing tax ruling granted to Starbucks artificially, and illegally, lowered the company’s tax burden in the Netherlands. The Netherlands said it plans to appeal the decision, stating that the country “greatly values its practice of offering certainty in advance” through the issuance of tax rulings to multinational corporations.
Dijsselbloem, whose country currently holds the rotating presidency seat on the European Council, said that the Netherlands decided to appeal the commission’s decision in order to seek full clarity on the standards that need to be applied on arrangements agreed to between the tax authorities and multinational enterprises.
Starbucks said it also will appeal, stating that there are significant errors in the decision.
At the recent Economic and Financial Affairs (ECOFIN) Council meeting in Brussels, finance ministers from EU nations exchanged views on the Programme of the Netherlands Presidency of the Council of the European Union. During the Netherlands Presidency, the following EU tax action items are on the agenda:
· Combating tax evasion and avoidance, including increased transparency in efforts to tackle corporate tax avoidance based on the final package of measures agreed to as part of the Organisation for Economic Co-operation and Development’s (OECD’s) base erosion and profit shifting (BEPS) project,
· A forthcoming proposal from the EC for the conversion of BEPS measures into European Union (EU) legislation,
· Further discussion on the inclusion of a minimum effective tax clause in the Interest and Royalty Directive that is aimed at abolishing withholding taxes on royalty and interest payments arising in an EU state,
· An action plan for a more effective value added tax (VAT) regime, including VAT on cross-border transactions within the EU, and
· An action plan for an efficient and fraud-proof VAT regime in the context of the digital single market, including the potential wider use of the VAT reverse charge mechanism.
The Netherlands’ presidency seat on the European Council ends on June 30, 2016.
Note: On January 11, European Tax Commissioner Pierre Moscovici promised to present an ambitious anti–tax avoidance package soon, stating that 2016 should be the year of corporate tax reform and fiscal transparency.