An investigation into base erosion and profit shifting

In a research report (Dutch only) based on four cases, SOMO has identified how companies avoid paying tax in the Netherlands (as opposed to avoiding tax via the Netherlands). Through a literature study, our own research and interviews with tax specialists, this report describes avoidance structures that Dutch companies can use to reduce their tax liabilities in the Netherlands. The four cases researched were the BCD Group, G-Star, Ahold Delhaize and Aegon.

The structures that were found reveal how harmful tax competition between countries is and the shortcomings of the current transfer pricing system.


The Netherlands should take a number of measures to prevent tax avoidance:

  • The Netherlands must commit to the full implementation of the EU proposal for Common Consolidated Corporate Tax Base (CCCTB) to combat tax competition and associated aggressive tax planning by companies;
  • The Dutch government should levy withholding tax on interest payments made from the Netherlands to tax havens such as Curaçao;
  • The Netherlands should revise the Dutch Curaçao Tax Regulations, cancel the special arrangement for outgoing dividends from the Netherlands to Curaçao, and reinstate the standard withholding tax (15 per cent) on dividends paid to Curaçao from the Netherlands;
  • The Netherlands should introduce rules that prevent holding patents and trademarks in low-tax countries. To this end, it should above all support the EU plan against tax avoidance (better known as ATAD);
  • The Netherlands should levy withholding tax on royalty payments made from the Netherlands to tax havens or jurisdictions where royalty income is taxed at a low rate, based on tax facilities;
  • When relocating intellectual property from abroad to the Netherlands, the tax authorities should check whether the value had already been written off (or an exit tax had been levied) in that country;
  • The Netherlands should make rulings by the tax authorities public;
  • The participation exemption should be limited, and the Dutch tax authorities should check whether profits distributed to Dutch parent companies abroad are effectively taxed at the Dutch corporate income tax rate. Where this is not the case, the Dutch tax authorities must provide information.

Important transparency recommendations that emerged from this research are:

  • The Netherlands should make country-by-country reporting mandatory for all subsidiaries;
  • The Netherlands should abolish the limited publication obligation of subsidiary financial statements.


For this research, SOMO selected a number of companies for which a previous SOMO report Big Companies, Low Rates showed a low tax rate. More information about possible avoidance structures was sought. Based on the availability of financial information per company, further investigation was done on a number of companies regarding ownership structures, financial transactions between subsidiaries and presence in tax havens.

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publication cover - Hidden tax practices of Dutch companies
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