Netherlands surprised at Obama tax haven slur

US president Barack Obama and his secretary of the threasury Timothy Geithner.
By our financial desk

The Dutch embassy in Washington has expressed surprise at president Barack Obama's qualification of the Netherlands as a tax haven.

Obama on Monday presented a series of proposals aimed at curbing the tax benefits enjoyed by companies and wealthy individuals harboring cash in offshore accounts, including in the Netherlands.

US multinational corporations in 2004 paid only 16 billion dollars in US taxes on 700 billion dollars in foreign earnings. Obama didn't name the Netherlands in his speech, but a fact sheet distributed to journalists said nearly one-third of all foreign profits reported by such corporations in 2003 came from three low-tax countries: Bermuda, Ireland and the Netherlands.

In a reaction to the US media, the Dutch embassy in Washington said it was surprised that the White House should qualify Netherlands as a low-tax country.

"This is factually not correct," the statement said. "Dutch corporate taxation is fully transparent and the rate is 25.5 percent, which puts us in the medium-tax rate category and not in the low-tax category."

It also said the Netherlands is working together with the US - also in a G20 framework - in dealing with countries that have bank secrecy or are non-transparent. "The Netherlands shares tax-related information with the US without reservation," the statement said.

The White House wants to collect 210 billion dollars over the next ten years by fixing what Obama called a "broken tax system". Multinationals, he said, pay an average tax rate of just 2 percent on their foreign revenues.

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