25th May 2022

Dutch minister draws fire on EU and tax-havens

Listen to article

Dutch finance minister Wopke Hoekstra should excuse himself from an EU decision on tax-havens after he was named in the 'Pandora Papers' revelations, a leading MEP has said.

EU finance ministers are to rubber-stamp an updated blacklist of shady tax-havens on Tuesday (October 5).

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

But a leak of financial documents on Sunday tied 27 EU politicians, including Hoekstra to secretive overseas holdings.

And for Paul Tang, a Dutch centre-left MEP who chairs the European Parliament's tax committee, that meant Hoekstra should symbolically stay out of the EU tax-haven decision.

"Global elites continue to use tax havens to hide their money," Tang tweeted on Monday.

"Hoekstra, who had investments in the British Virgin Islands (BVI), should excuse himself from this decision," Tang added.

The Pandora Papers leak showed Hoekstra, a former McKinsey partner, invested €26,500 in safari parks in Kenya and Tanzania via Candace Management in 2009, an offshore company incorporated in the BVI, a British protectorate in the Caribbean.

Hoekstra who entered politics shortly after eventually sold his interest in the firm a week before he became minister in 2017, reportedly saying to the owner of the parks: "I have to get rid of these, now."

He also took to Twitter, saying that he did not know the firm was based in the BVI and that he donated the profit to a cancer charity.

He did not report the transaction at the time because "he was not obligated to", he said.

But even if Hoekstra did not break any law, his exposure in the Pandora's papers affair has made him a lightning rod for reform.

"Even if it's allowed, it's not desirable. This is primarily about what is socially acceptable," Leen Paape, a professor of corporate governance at Neyenrode University in the Netherlands, speaking of Hoekstra's conduct.

"It is outrageous to see that some of the politicians that pretended to crackdown secret shell companies were in using them themselves," Tove Ryding from Eurodad, a Brussels-based pro-tax justice NGO, said to EUobserver.

"It shows reports already announcing the end of tax havens are greatly exaggerated," she added.

"In the Netherlands, the defence is always that everyone does it, and it isn't prohibited ... that's a naive representation of the facts," Tang, the MEP, also told a Dutch newspaper.

He said the "Italian mafia" used similar financial tricks to those of Hoekstra.

And he noted that Germany had much stricter tax laws than the Netherlands.

Reforms needed

"Strong reforms are needed, starting tomorrow when EU ministers of finance discuss the list," Tang also tweeted on Monday, saying the current EU tax-haven blacklist was "completely inadequate".

The list excludes known tax-havens such as Ireland, the City of London and BVI-type UK protectorates, Luxembourg, Malta, the Netherlands, and Switzerland, among others.

"While the list can be a good tool, member states forgot something when composing it: actual tax havens," Tang wrote in a statement earlier in January.

"We need to look ourselves in the mirror. EU countries are responsible for 36 percent of tax-havens," he said.

"In refusing to address tax avoidance properly, EU governments are failing their citizens to the tune of over €140bn," he noted.

And according to a 2017 study, neighbouring member states miss out around €19bn in tax revenues annually due to corporate tax avoidance facilitated by the Netherlands alone.

The Pandora Papers leak consisted of nearly 2.94 terabytes of data - the biggest in history.

Other EU politicians names in the revelations were Czech billionaire-prime minister Andrej Babiš and Cypriot president Nicos Anastasiades

And for his part, Spanish Green MEP Ernest Urtasun has called on the European Commission to start infringement proceedings against member states that have not "correctly transposed rules against money laundering and administrative cooperation."

He also called for a parliamentary debate on Pandora's Papers during the plenary session in Strasbourg this week.

Tax advocates slam EU country-by-country directive

Country-by-country reporting (CDCR) will require non-EU multinationals doing business in the EU through subsidiaries to comply with the same rules as European companies. However, companies are allowed to defer disclosure of certain information for a maximum of five years.

Hungary and Estonia blocking EU tax reform

Hungarian and Estonian diplomats have blocked a revised set of tax rules, potentially derailing an effort to curb the race for ever-lower corporate taxes in the EU.

EU unveils plan to repay Covid recovery-fund borrowing

The European Commission has presented three new sources of revenues for the EU´s coffers aimed at repaying the emergency coronavirus recovery fund and supporting vulnerable households in the transition towards climate neutrality.

News in Brief

  1. Dutch journalists sue EU over banned Russia TV channels
  2. EU holding €23bn of Russian bank reserves
  3. Russia speeds up passport process in occupied Ukraine
  4. Palestinian civil society denounce Metsola's Israel visit
  5. Johnson refuses to resign after Downing Street parties report
  6. EU border police has over 2,000 agents deployed
  7. Dutch tax authorities to admit to institutional racism
  8. Rutte calls for EU pension and labour reforms

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic delegation visits Nordic Bridges in Canada
  2. Nordic Council of MinistersClear to proceed - green shipping corridors in the Nordic Region
  3. Nordic Council of MinistersNordic ministers agree on international climate commitments
  4. UNESDA - SOFT DRINKS EUROPEEfficient waste collection schemes, closed-loop recycling and access to recycled content are crucial to transition to a circular economy in Europe
  5. UiPathNo digital future for the EU without Intelligent Automation? Online briefing Link

Latest News

  1. EU summit will be 'unwavering' on arms for Ukraine
  2. Orbán's new state of emergency under fire
  3. EU parliament prevaricates on barring Russian lobbyists
  4. Ukraine lawyer enlists EU watchdog against Russian oil
  5. Right of Reply: Hungarian government
  6. When Reagan met Gorbachev — a history lesson for Putin
  7. Orbán oil veto to deface EU summit on Ukraine
  8. France aims for EU minimum-tax deal in June

Join EUobserver

Support quality EU news

Join us