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The Debate Continues: Inward Investment Versus Tax Collection

The Debate Continues: Inward Investment Versus Tax Collection
Global
18 Dec 2012
This article was first published in De Volkskrant, 18 December 2012

Research undertaken by Taxand reveals new, but not entirely surprising, results that governments across the world are facing a crisis. A number of countries have decreased their corporate tax rate this year, while there is a dilemma of balancing the need to improve government budgets deficits without decreasing the attractiveness of their countries for multinational investment.

Marc Sanders, Taxand Netherlands says "that a lot of countries have increased taxes to reduce deficits but in general through an increase in VAT rates. This results in less public discussion and provides additional tax revenues. For example the increase of the VAT rate in the Netherlands."

On possible actions by Dutch parliament with regard to tax abuse: Marc Sanders warns for possible consequences, "The offices in the Amsterdam business district need to be filled. The Dutch participation exemption allows for an exemption of income which has already been taxed abroad. This does not make the Netherlands a tax haven."

He feels that it is strange that the UK now complains about tax planning as "the UK government has announced that it wants to become the most attractive in Europe from a tax perspective".

Frederic Donnedieu de Vabres, Chairman of Taxand, thinks that companies will look forward to 2013 with mixed emotions, "Whilst we have seen the emergence of numerous positive measures, as countries look to bolster their competitiveness, we have also seen a number of governments continue to penalise businesses in order to plug budget deficits."

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Taxand's Take

"Whilst we have seen the emergence of numerous positive measures, as countries look to bolster their competitiveness, we have also seen a number of governments continue to penalise businesses in order to plug budget deficits."

Taxand's Take Author