The Netherlands: Multi-Nationals using tax loopholes around the world dodge paying taxes just about everywhere.

Developing countries' urgent need to boost their tax revenues in order to fund schools, hospitals and the fight against poverty won welcome backing today from Europe, says Christian Aid. 'We're delighted to see that the European Commission has really woken up to the power of tax,' said Dr David McNair, Christian Aid's Senior Adviser, Economic Justice. 'It is highly significant that it has explicitly recognised poor countries' need for higher tax revenues in order to achieve Millennium Development Goals such as halving extreme poverty and hunger and reducing child mortality.  Christian Aid also warmly welcomes the EU Commission's acknowledging the importance of a new accounting standard requiring multinational companies to reveal the taxes they pay and the profits they make in every country where they operate. The standard, known as country-by-country reporting, would dramatically boost poor countries' efforts against tax dodging by multinationals.

These statements however have absolutely no teeth if they are not implemented and acted upon. If we focus on the EU and in particular the Netherlands, we see that the 20 top multi-national companies registered there pay little or no tax at all because of the loopholes which exist in the Dutch tax system favoring multi-nationals. At the same time in order to cut the government budgetary deficit, just about every tax benefit was closed for small businesses and the wage earning public. When politicians are confronted about this their standard answer has always been,"if we close the tax loopholes for the multinationals and make them pay taxes they will go elsewhere and jobs will be lost". Does anyone in his or her right mind believe that a multi-national company established in the Netherlands would go to the Cayman islands or any other tax haven and give up being in one of the hubs of the EU, worlds largest economy, surrounded by an infrastructure of airports, financial centers,seaports, transportation systems ?

Getting the multi-nationals to truly contribute to society by paying their fare share in taxes instead of creating more wealth for their shareholders by dodging taxes and self serving philantrophy is now more essential than ever.  It needs to happen soon and will require multilateral cooperation and agreements among governments around the world. The EU can and should take a lead in this. Action not talk is required.