The Netherlands: Only a smokescreen is still holding the Center Right Dutch Government coalition together

The pieces might have been stuck together, but the "adhesive" attempts of the Center-Right Rutte II  Government are taking more and more desperate forms.

To limit further loss of face lhe Government coalition is trying to find a way to sneak past the Upper Chamber (Senate) blockage of their revised health-care legislation.

Opposition parties which have been collaborating with the government on major issues have indicated they will not support changes in the legislation.

Read more: Rookgordijn houdt kabinet-Rutte II overeind - AD.nl

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EU-Digest 

The Netherlands - while poor segments of Dutch population suffer Government still legally allowing 20,000 letter-box companies to circumvent taxation

The Netherlands harboring  more than 20.000 letter box companies

A White House factsheet in 2009 reported. "Nearly one-third of all foreign profits reported by US corporations in 2003 came from just three small, low-tax countries: Bermuda, the Netherlands, and Ireland."

Like the Queen in Shakespeare's 'Hamlet' who protested that 'The lady doth protest too much, methinks,' the Dutch government hypocritically objected to the Netherlands being dubbed "a tax haven" and the White House agreed and deleted the line. 

The Dutch tax haven, has now more than  20,000 letter-box companies and in recent years even Facebook joined U2, the popular Irish rock group, to circumvent the tax system.. 

The Netherlands also hosts thousands of foreign financial vehicles. Bloomberg reports that a bookkeeper’s home office in Amsterdam also doubles as the headquarters for a Yahoo! Inc. offshore unit. 

It is a scandal that deficit-strapped Holland is raising retirement ages and taxes on the working classes while the Netherlands’ Government of PM Rutte and coalition partner Samson continues to allow their country to be a €10.2trillion conduit on the global tax-avoiding network. 

 

Bloomberg says that attracted by the Netherlands’ lenient conservative policies and and an extensive network of tax treaties, companies such as Yahoo, Google, Merck & Co and Dell have moved profits through the Netherlands

Using techniques with nicknames such as the “Dutch Sandwich,” multinational companies routed €10.2trillion in 2010 through 14,300 Dutch “special financial units,” according to the Dutch Central Bank. Such units often only exist on paper, as is allowed by Dutch  law.

Google, IBM and Italian oil and gas group ENI head the list of companies using letter-box companies to cut their Dutch tax bills to between 0 and 5%, the Volkskrant daily said in an article.

According to theDutch  Financieele Dagblad , French state companies are also among those using the Netherlands to cut their tax bills.

In the meantime the Dutch Governmen has been dancing around the subject.  

Frans Weekers, Dutch deputy finance minister, said the controversy over the letterbox companies had damaged the Netherlands’ investment climate. “Over the past 10 years the trend has been for the number of letterbox companies in the Netherlands to keep growing. I want to turn that trend around,” Weekers told The Financial Times. “I see the Netherlands being portrayed in a bad light. I don’t want to be portrayed in a bad light." 

Recently the Dutch government said tax treaties with Zambia and 22 other poor countries will be revised to allow the incorporation of anti-abuse clauses where necessary, but has not said a word about the major players which have letter box companies registered in the Netherlands and are involved in these tax evading schemes 

The European Commission has now said it will attempt to close a loophole that allows companies to cut their tax bill, a top official said on Monday, but the EU executive will first need to persuade member countries to back the change.

The commission wants rules to prevent companies setting up “letter-box subsidiaries” in countries solely to qualify for a softer tax regime and cut their bill.

Algirdas Semeta, the EU’s taxation commissioner, wants to insert an anti-abuse clause by the end of next year, allowing authorities to target artificial “parent-subsidiary” schemes that flout the spirit of the tax code.

“When our rules are abused to avoid paying any tax at all, then we need to adjust them,” he said. “Today’s proposal will ensure that the spirit, as well as the letter, of our law is respected.”

Semeta declined to name countries or companies that exploited the loophole but said that billions of euros were at stake.

 EU-Digest

New Netherlands government to cut budget by16 billion euro,will continue strict immigration laws and ditches proposed controls on 'weed' use

Amsterdam Marijuana Tourism Alive and Well

The two parties forming the new Dutch Government including the center-right Liberal party of Mark Rutte and the center-left Labor party, led by Diederik Samsom have reached a coalition agreement that will pursue pro-European policies with an emphasis on austerity – stated it will cut 16 billion euro in government spending in the health care, social security and educational sectors.

As to the Netherlands immigration policies, including the 2007 treaties that govern Bulgarian and Romanian accession to the EU, which provided for a seven-year transition period before nationals of those countries would obtain full access to the labor markets of other EU member states, the new Dutch Government said it will remain among those EU states that plan to maintain the restrictions for the entire 7 year transition period which ends in 2014.

The incoming new Dutch government has also ditched plans by the previous government for a national "weed pass" that would have been available only to Dutch residents and that would have effectively banned tourists from Amsterdam's and many other cities in the Netherlands with marijuana cafes.

However, under a provisional governing pact unveiled this week, cities can still bar foreigners and tourists from weed shops but only if they so choose.

The pact says that it wants only Dutch residents to have access to marijuana cafes, but leaves final enforcement up to local cities governing bodies. Amsterdam which has a very lucrative red-light district with large numbers of marijuana cafes, or coffee shops as they are called in Holland, opposes any ban which would hurt the Amsterdam tourist industry..

Some cafe owners said Tuesday that they are satisfied Dutch weed policy will remain unchanged, while others criticized the lack of clarity.

Marijuana trafficking is technically illegal in the Netherlands, but people can't be prosecuted for possession of small amounts and the drug is sold openly in designated and licensed coffee shops.

EU-Digest