Netherlands Is the Tax Haven of Choice for Global Arms Dealers

Telesur 2 June 2016 - Amongst the big companies using the Dutch tax evasion routes are a large number of arms manufacturers and major international defense companies. The Netherlands is a top tax haven for the world's biggest arms dealers, the Transnational Institute said on Thursday. The Dutch research group’s statement, accompanied by a new report relying on data from the Dutch Chamber of Commerce, found that six of the world's top 10 biggest arms dealers are based in the Netherlands in order to benefit from its favorable tax and trade system.

Most of the the arms companies are registered through letterbox addresses, with zero or minimal personnel presence in the Netherlands, according to the new publication, “Tax Evasion and Weapon Production.”

“Their almost empty offices and sometimes only having a mailbox allows them to legally pay as little tax as possible,” the report notes. 

A priority of the Dutch political establishment is attracting foreign capital through tax breaks and subsidies, with Dutch multinationals only paying an effective tax rate (ETR) of 8 percent to 20 percent. The European average corporate tax rate is 22.6 percent, according to report.The study demonstrates how arms companies profit from public money but contribute as little as possible to the public budgets of the countries in which tey are based. 

Among the big companies exploiting Dutch laxity are U.S. military contractors Lockheed Martin, Boeing and BAE Systems. Many of these companies have a record of corruption that goes beyond tax evasion, the report added. Citing data from the Stockholm International Peace Research Institute (SIPRI), the report estimates that corruption in the arms trade contributes accounts for around 40 per cent of all global corruption.

The report calls on Duch officials to acknowledge that by providing such an attractive tax haven for these arms companies, the country's elected officials also bear responsibility for both the financial and human costs caused by the arms trade.