The European Commission (EC) will be presenting a bill this year to tackle the abuse of letterbox companies.

'Empty shell' companies that are only registered somewhere but are not economically active often use such a construction to avoid tax.

According to the committee, this should be subject to sanctions.

The Netherlands has a reputation for letterbox companies.

The European Court of Justice still denounced the Netherlands and Luxembourg as fiscal conduit countries in 2019.

According to De Nederlandsche Bank (DNB), in 2018 the Netherlands had twelve thousand holding and financing companies belonging to foreign multinationals, without production and employment in the Netherlands.

The outgoing cabinet is already underway with additional measures to combat tax avoidance via letterbox companies established in the Netherlands.

The EC's proposal is part of a report by the EU executive board on corporate taxation in the 21st century.

In it, the committee states that it supports the ongoing international negotiations on the introduction of a global minimum profit tax for large multinationals.

This tax should put an end to the "race to the bottom", of large companies in particular that do everything they can to pay as little tax as possible and countries that attract companies with increasingly lower rates.

If a minimum rate were to be set, then the member states can determine themselves whether they want to go above it, the committee says.

Digitaks is likely to arrive this summer

As soon as agreement is reached on this in the international economic partnership of the Organization for Economic Cooperation and Development (OECD), Brussels will amend European legislation for a tax on digital companies (digital tax).

An agreement would already be within reach this summer.

Currently, tax legislation is based on companies that are physically located somewhere and generate their turnover there. Large technology groups such as Amazon or Apple often set up branches in tax-attractive countries. At the same time, they achieve enormous revenues in other countries that do not see this in their treasury.

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