Choosing the Smartest Tax Submission Solution

 Choosing the Smartest Tax Submission Solution

Media reports about multinational companies often have a negative tone: multinationals only come to the country because of the favorable tax climate, but provide little economic added value for our country. However, there is a wide range of factors that make the country attractive to foreign companies. Moreover, Statistics country points out that the scientific view of multinationals is predominantly positive and that they make an important contribution to our economy. Foreign companies pay taxes, use suppliers and contribute to the transfer of knowledge. Moreover, foreign multinationals create a lot of employment in the country: a total of about 900,000 jobs. You can also go for the track my tax return option as well.

The Right Choices

The fact that the country has an attractive business climate is due to various factors. Companies in the country find a smooth connection with the international value chains in which they operate. They benefit from the strategic geographic location and fast, reliable logistics infrastructure. The country offers them access to knowledge that ranks among the best in the world: access to a well-educated workforce and the fruits of pioneering research. In addition, a clear and stable political, legislative and administrative environment makes the country attractive. The accessible, efficient and independent jurisdiction in the country offers companies the necessary legal certainty to make investments and enter into transactions.

The Right Tax Solutions

A tax system that promotes international investment is also an important part of the business climate. The country tax system is based on the central principle of a level playing field between national and cross-border companies. A number of characteristics of the country system contribute to this. The country applies a participation exemption, so that a country company with a foreign subsidiary is not assessed twice for the profit that this subsidiary makes abroad. 

  • To prevent foreign companies operating in the country from paying double tax, the country does not apply withholding tax on interest and royalties. The country also has a strong international treaty network. Treaties with other countries prevent double taxation on certain incomes and provide legal certainty for internationally operating companies. Finally, the country offers international entrepreneurs certainty in advance about the tax consequences of their actions.

The cabinet is of the opinion that these elements contribute to good and fair trade relations with other countries. It would be good if all countries applied these principles. However, country tax systems differ in many ways. These differences have helped some internationally operating companies to find opportunities to erode tax bases and artificially shift profits to minimize their tax payments. This tax avoidance does not contribute to a level playing field, but rather distorts fair competition. For example, it casts a shadow over the country tax system, which is precisely designed to promote fair business practices. The country therefore wants to be at the forefront of countries that want to combat international tax avoidance (see Box 2.5.1). The aforementioned strengths of the country system are not under discussion with regard to the cabinet.

David Curry