Photo: Steven Shorrock

Ministry of Finance forced to disclose top 10 of most-used structures

For the first time, the Dutch Ministry of Finance has had to disclose the structures of so-called tax rulings: secret deals that are agreed with hundreds of corporations annually in the Netherlands. Through a Freedom of Information request, the Dutch newspaper Trouw has obtained an internal government memo in which the most common structures for hundreds of Advance Pricing Agreements (APAs) and Advance Tax Rulings (ATRs) are listed.

Until now, the Minister of Finance and his Deputy Minister had so far never shared such information with neither the Dutch Parliament, nor the public. At the end of March 2017, the disclosure of these sensitive government documents prompted major media coverage, public outcry, and political debate about tax rulings in the Netherlands. Many rulings are agreed with foreign corporations, which means this Dutch government memo is also of particular interest to an international audience.

The need for a translation Dutch newspaper Trouw received the memo after a Freedom of Information request.  The memo – and other documents released after related Freedom of Information requests – has reopened (or, in fact, continued) the discussion about tax rulings in the Netherlands.The memo gives some insights into what exactly is in these secretive tax deals. As many politicians, civil society organisations, journalists, and so many others have asked for more openness and information regarding the content of rulings, this internal memo is of interest and relevant for the work of many outside the Netherlands. Therefore, SOMO together with Oxfam Novib decided to translate this document. Even though it concerns specifically rulings offered by the Dutch tax authority, most of the rulings are agreed with foreign corporations, which is why translation is appropriate.

Carry on as usual

The memo dates back to 2015 and was prepared by the so-called ‘APA/ATR-team’ for Eric Wiebes, Deputy Minister for Finance. The memo was to inform him about the (then) current ruling policy and practice of the Ministry, in preparation for a decision on whether the current policy and practice should carry on as usual.  He decided that continuation was indeed no problem.

The memo was never discussed in Dutch Parliament, despite repeated questions by Dutch MPs for more detailed information about the content of tax rulings with (foreign) companies in the Netherlands. The Dutch Parliament – and so many other national European parliaments – have been refused information that – apparently – was readily available. This information is crucial in fulfilling their task of exercising democratic control of the functioning and policies of the government. Withholding this information despite of multiple requests and debates in Parliament in recent years is harmful to democracy.

What is actually in the memo? The internal memo sums up the most common tax planning structures that are laid down in tax rulings – the secretive deals made between corporations and national tax authorities in order to provide “certainty beforehand”. Most of these rulings are agreed with foreign corporations. The memo describes ten different corporate ownership and/or financing structures, including the importance of these structures to the Dutch ‘fiscal investment climate’ and the impact of the political developments of that moment – mainly the Base Erosion and Profit Shifting project of the OECD for which, at that time, negotiations were being finalised. All structures show very clearly how Dutch tax policies, such as the participation exemption or the absence of withholding taxes on interest and royalties, and Dutch corporate legal forms, such as the cooperative and the limited partnership company (‘CV’), are widely used mainly for tax planning (a.k.a. tax-evasion) purposes. In the document, civil servants argue that some of these intermediate holding companies, which are often letterbox companies, do actually provide some employment. However, the memo does not offer any data, sources or other information as proof. In general, these rulings illustrate the use of the Netherlands as a conduit country – and the key role that rulings play in this tax dodging system The memo seems to lack well-thought-out and evidence-based arguments and risk analyses. Moreover, the memo comes across as quite sloppy, containing for example several grammatical errors.

Keeping them in the dark

The Ministry not only kept Dutch MPs in the dark, but also foreign tax authorities. For example, regarding informal capital rulings, the memo states that:

The Netherlands levies the amount to which it is entitled, whereas the foreign country does not (fully) levy what, in our view, it is entitled to. It goes without saying that creating international mismatches causes tension, especially if certainty about it is provided beforehand. After all, we see that informal deals are being done and to date we have not been informing the other tax authority about these deals.

Note that since 1 January 2017, under new EU rules, the authorities are required to exchange limited information about rulings. But it remains unclear how helpful the Dutch tax authorities have been and might still be towards their colleagues abroad.


The Dutch tax authorities are, however,  very friendly towards (foreign) corporations. The attitude and arguments of the civil servants that wrote the memo leads to the thought that corporate lobbying is a waste of money and time: the civil servants at the tax authority could not be more business-friendly. In the game of tax rulings, it seems corporations and governments are on the same team.

The memo not only provokes such considerations; it also leaves us with some questions. Such as: What does this mean in terms of state aid? Are any of the structures described at risk of not being in line with EU competition rules?

Now what?

At the request of various MPs, a plenary debate will be held in the Dutch Parliament. The Deputy Minister will then have to provide more information based on the several written parliamentary questions he has already received, and of course try to defend the government’s policies and his decision to not share more information on several occasions over the past few years. To be continued…

Sources (all in Dutch):

Links to news articles:

Links to relevant ‘Freedom of Information’ requests: