# CE2004088EN.01020401.xml

| 8.4.2004 | EN | Official Journal of the European Union | CE 88/204 |
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8.4.2004

EN

Official Journal of the European Union

CE 88/204

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(2004/C 88 E/0212)

WRITTEN QUESTION E-0684/04

by Erik Meijer (GUE/NGL) to the Commission

(9 March 2004)

Subject:   Parmalat and incentives arising from poor tax legislation in the Netherlands for foreign businesses with dishonest intentions

Subject:

| 1. | Is the Commission aware that Forum Administrations, a subsidiary of the major Dutch law firm Nauta Dutilh, controls at least one foundation and five private limited companies in the Netherlands of which a majority of the shares are in Italian hands and which are linked to the discredited Italian dairy company Parmalat? |
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1.

Is the Commission aware that Forum Administrations, a subsidiary of the major Dutch law firm Nauta Dutilh, controls at least one foundation and five private limited companies in the Netherlands of which a majority of the shares are in Italian hands and which are linked to the discredited Italian dairy company Parmalat?

| 2. | Is the Commission aware that, via this Dutch route, nearly EUR 6 000 million's worth of Parmalat bonds have been issued, that the most recent issue of EUR 350 million was made as recently as September 2003 and that these bonds have since become worthless? |
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2.

Is the Commission aware that, via this Dutch route, nearly EUR 6 000 million's worth of Parmalat bonds have been issued, that the most recent issue of EUR 350 million was made as recently as September 2003 and that these bonds have since become worthless?

| 3. | Is the Commission further aware that, according to the Netherlands Central Bank, EUR 800 000 million in property is registered with 181 Dutch trust offices? |
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3.

Is the Commission further aware that, according to the Netherlands Central Bank, EUR 800 000 million in property is registered with 181 Dutch trust offices?

| 4. | Can the Commission confirm that, at the present time, a remarkable number of companies not based and not mainly active in the Netherlands are seeking ways of channelling their finances and debts through that country because of the tax advantages that they expect to enjoy there? |
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4.

Can the Commission confirm that, at the present time, a remarkable number of companies not based and not mainly active in the Netherlands are seeking ways of channelling their finances and debts through that country because of the tax advantages that they expect to enjoy there?

| 5. | In what way is current tax legislation in the Netherlands, which was amended in the 1990s, exceptional in comparison with other EU Member States? What makes the Netherlands' tax legislation so attractive to foreign businesses? |
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5.

In what way is current tax legislation in the Netherlands, which was amended in the 1990s, exceptional in comparison with other EU Member States? What makes the Netherlands' tax legislation so attractive to foreign businesses?

| 6. | Does current Netherlands tax legislation offer businesses the opportunity in particular to circumvent other countries' rules, and, in so doing, does it provide opportunities for those that wish to gain an advantage to the detriment of other companies, authorities, employees, shareholders, bondholders, suppliers and consumers? |
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6.

Does current Netherlands tax legislation offer businesses the opportunity in particular to circumvent other countries' rules, and, in so doing, does it provide opportunities for those that wish to gain an advantage to the detriment of other companies, authorities, employees, shareholders, bondholders, suppliers and consumers?

| 7. | Does the residence of a legal person in the Netherlands also make it easier to benefit from the tax advantages of the six Caribbean islands that belong to the Kingdom of the Netherlands but not to the EU, where Parmalat also has subsidiaries? |
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7.

Does the residence of a legal person in the Netherlands also make it easier to benefit from the tax advantages of the six Caribbean islands that belong to the Kingdom of the Netherlands but not to the EU, where Parmalat also has subsidiaries?

| 8. | What, in the Commission's view, should be changed in the Netherlands' tax legislation? Source: the Netherlands newspaper De Volkskrant, edition dated 22 January 2004. |
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8.

What, in the Commission's view, should be changed in the Netherlands' tax legislation? Source: the Netherlands newspaper De Volkskrant, edition dated 22 January 2004.

Answer given by Mr Bolkestein on behalf of the Commission

(26 April 2004)

(26 April 2004)

| 1. 2. and 3. | The Commission is aware of the issues raised in the article in the newspaper ‘De Volkskrant’ of 22 January 2004 and of the problems with Parmalat. The Commission is also aware that there is a link between some of the issues that lie at the heart of the Parmalat case and disclosure requirements, and therefore intends to propose approriate amendments to the 4th and 7th company law directives in the autumn. |
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1. 2. and 3.

The Commission is aware of the issues raised in the article in the newspaper ‘De Volkskrant’ of 22 January 2004 and of the problems with Parmalat. The Commission is also aware that there is a link between some of the issues that lie at the heart of the Parmalat case and disclosure requirements, and therefore intends to propose approriate amendments to the 4th and 7th company law directives in the autumn.

| 4. | The Commission has no official information at its disposal on the number of companies registered in the Netherlands which are being used to channel finances so as to lower the overall tax burden of the group. |
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4.

The Commission has no official information at its disposal on the number of companies registered in the Netherlands which are being used to channel finances so as to lower the overall tax burden of the group.

| 5. | The tax legislation in the Netherlands provides for an exemption of taxes for profit distribution and capital gains related to subsidiaries resident in other countries in order to prevent double taxation. This principle for reducing double taxation is an internationally accepted principle and some other Member States have similar systems. However, the Dutch ‘holding regime’ was scrutinised under the Code of Conduct for business taxation that has been agreed by Member States in order to prevent harmful tax competition. The final conclusion was that the Netherlands should strengthen its anti-abuse measures in relation to this regime. The Netherlands has now done so. |
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5.

The tax legislation in the Netherlands provides for an exemption of taxes for profit distribution and capital gains related to subsidiaries resident in other countries in order to prevent double taxation. This principle for reducing double taxation is an internationally accepted principle and some other Member States have similar systems. However, the Dutch ‘holding regime’ was scrutinised under the Code of Conduct for business taxation that has been agreed by Member States in order to prevent harmful tax competition. The final conclusion was that the Netherlands should strengthen its anti-abuse measures in relation to this regime. The Netherlands has now done so.

| 6. | The Commission is not aware of Dutch tax legislation that provides for any particular way of circumventing other countries' rules. As mentioned earlier, the Netherlands has taken steps to prevent the potential abuse of the Dutch system through the introduction of more stringent anti-abuse rules in the framework of the Code of Conduct for business taxation. |
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6.

The Commission is not aware of Dutch tax legislation that provides for any particular way of circumventing other countries' rules. As mentioned earlier, the Netherlands has taken steps to prevent the potential abuse of the Dutch system through the introduction of more stringent anti-abuse rules in the framework of the Code of Conduct for business taxation.

| 7. | As part of the Code of Conduct exercise, the tax rules of the Netherlands Antilles and Aruba were also subjected to scrutiny. The result is that both the Netherlands Antilles and Aruba are now required to remove their harmful tax measures i.e. the tax advantages that the Council considered to be harmful. The advantage for a Netherlands resident of doing business in the Netherlands Antilles and Aruba would therefore only arise now from the fact that there is an agreement between the three parts of the Kingdom of the Netherlands to prevent double taxation which is quite similar to the bilateral tax conventions preventing double taxation that Member States and Organisation for Economic Cooperation and Development (OECD) member countries negotiate with each other and with other countries. |
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7.

As part of the Code of Conduct exercise, the tax rules of the Netherlands Antilles and Aruba were also subjected to scrutiny. The result is that both the Netherlands Antilles and Aruba are now required to remove their harmful tax measures i.e. the tax advantages that the Council considered to be harmful. The advantage for a Netherlands resident of doing business in the Netherlands Antilles and Aruba would therefore only arise now from the fact that there is an agreement between the three parts of the Kingdom of the Netherlands to prevent double taxation which is quite similar to the bilateral tax conventions preventing double taxation that Member States and Organisation for Economic Cooperation and Development (OECD) member countries negotiate with each other and with other countries.

| 8. | Member States are free to design their tax systems as long as the rules comply with the EU acquis, notably the state aid rules, the fundamental freedoms in the EC Treaty and the principles of the Code of Conduct for business taxation. |
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8.

Member States are free to design their tax systems as long as the rules comply with the EU acquis, notably the state aid rules, the fundamental freedoms in the EC Treaty and the principles of the Code of Conduct for business taxation.

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