The Netherlands: A Tax Haven Suspect

In recent years, the Netherlands has been increasingly associated with the term 'tax haven'. Both the media and institutions, such as the Tax Justice Network, made these suggestions. What is the underpinning for these parties to make these claims? And, more important, are the accusations about the Netherlands being a tax haven true? The thesis has three objectives. The first objective is to give an in-depth description of the offshore industry. The second objective looks at the role of FDI and FPI: How do investors choose, how the worldwide investments flows look like and what the role for the Netherlands is. The third objective focuses on the Netherlands and the tax regulations that create opportunities for tax optimization structures. The acquired knowledge is put to use in a case study where tax structures are created for an American company with international sales. After researching the topic it is clear that the Netherlands should be regarded as a conduit country. A conduit country places itself between high tax countries and 'real' tax havens. Through the participation exemption and the extensive tax treaty network, companies are able to wire large sums of capital through the territory. This also explains the huge FDI in and outflow of the Netherlands. By doing so, the tax burden for multinationals can be considerably lowered.