Questions and answers IKEA
Where do we go from here?
The Netherlands and other stakeholders can respond to this decision and present their views on the matter to the Commission. The Commission shall pass its final judgment on the basis of these reactions and any further information requested.
As far as possible, the Commission shall endeavour to establish a final decision within 18 months after initiation of the procedure.
An appeal can not only be lodged against this decision by the Netherlands, but also by IKEA.
Why does The Netherlands make such agreements?
The Netherlands provides assurance in advance of applying legislation, policy and case law in a specific case. Not only companies, but citizens can also get assurance in advance. In a number of cases this is done in the form of so-called ‘Advanced Pricing Agreements (APA)’ and ‘Advanced Tax Rulings (ATR)’.
Assurance in advance contributes to legal certainty for citizens and companies, and enables supervision by the Tax and Customs Administration to be efficient and effective. The method also works out well in our business climate.
So, a ruling in itself is not the problem, that is also recognized in the EU and OECD context.
Rulings may not allow for preferential treatment of individual companies nor to a distortion of the internal market, which is also endorsed by the government.
In addition, in the Netherlands tax evasion has already been combated for quite some time now, by exchanging information among tax authorities worldwide. Information about rulings with an international character is also exchanged. For example, tax services are better able to levy tax dues based on their national legislation.
The government will also further strengthen its approach with the following measures:
- The European directives against tax evasion, ATAD 1 and ATAD 2, the Netherlands will implement within the agreed time period.
- Aside from countering tax evasion, tax avoidance is also being countered through the adaptation of tax treaties in order to combat letterbox company constructions. We make use of a multilateral international treaty, among other things, that many tax treaties can be adapted in one fell swoop. The Netherlands is one of the most advanced countries in Europe when it comes to adapting tax treaties in this way.
- In addition, the government levies source taxation on dividends, interest and royalties on outgoing financial flows to low-tax jurisdictions and in abuse situations.
- In an EU-context, the Netherlands also argues in favour of taking more mandatory measures against countries that are on the black list.