EU Competition Commissioner Criticises Netherlands Over Tax Breaks

by Ulrika Lomas, Tax-News.com, Brussels

31 July 2001

According to a recent report in the Dutch newspaper, Het Financieele Daglblat, EU Competition Commissioner, Mario Monti, has criticised the Netherlands for giving disproportionate tax advantages to international companies located there.

Monti, quoted in a letter sent to the Dutch State Secretary of Finance, Wouter Bos, criticised the fact that only a limited number of companies can take advantage of the taxation incentives, and said that the Competition Commission would be investigating the matter further in order to see whether improper state support is involved.

According to the paper, Mr Bos has stated that he will present evidence over the next month which will show that the advantage is available to a large group of companies, and not just to lucrative multi-nationals, that it doesn't distort trade, and that the Dutch government actually gains income as a result of the taxation incentives on offer, rather than paying extra for them. However, if the Commission rules against him, it could force affected companies to repay the money saved from the tax break.

Earlier this month, the European Commission announced that it would be looking into 15 harmful business tax practices taking place in EU member countries which are designed to lure investment and employment (in the form of holding companies and non-resident multinationals) away from other countries in the 15 nation bloc.

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