Tuesday , July 17 2018
Breaking News
Home / International Customs / MPs want answers about new tax avoidance trend
MPs want answers about new tax avoidance trend

MPs want answers about new tax avoidance trend

AMSTERDAM: MPs have called on the caretaker government to make a statement about the growing use of ‘funds for common account’, which allow wealthy individuals to avoid inclusion in public company ownership registers by setting up a joint fund for their assets.

The funds are taxed according to the actual profit they make and have been used by wealthy families for decades. In the Dutch tax system, most assets are assumed to make an annual return of 4%.

But now the introduction of a new law on share ownership will require anyone with more than 25% in a company to be included in a public register.

The new register is being set up in line with a European directive to prevent money laundering and the financing of terrorism, but will also help to make tax avoidance more difficult. Anyone who owns more than 25% of a company will be entered in the register, but if five people set up a fund they automatically fall below that percentage.

The tax office confirmed on Thursday that there has been a very large increase in the number of applications to set up a fund for common account. ‘But a request does not mean it will be approved,’ spokeswoman Eveline Petiti told the Volkskrant.

‘We are keeping a close eye on potential abuse.’ GroenLinks MP Tom van der Lee has asked tax minister to find out how much tax is being avoided by using the concept and wants him to bring in extra measures to stop the abuse.

‘I am concerned about the new ways people are always finding to anticipate future legislation,’ Van der Lee told Trouw, referring to the proposed new register of owners of companies. Labour MP Henk Nijboer said: ‘The most important instrument for preventing tax avoidance is to know who has to pay tax. That is precisely the intention of the register. We must not have a situation in which people immediately start trying to avoid it.’