Stellantis, the result of the merger between the car manufacturers Fiat-Chrysler and Peugeot, will become the world's fourth-largest car manufacturer. The multinational will not create more employment, but is surely a nice arrival for the tax authorities. After all, the company wants the Netherlands as location for its headquarters, both legally and fiscally. But whether this is actually going to happen is not yet certain, explains Peter Kavelaars, Professor of Economics of Taxation at Erasmus School of Economics, in a news item of RTL News.
Empty shell
Fiat has had its main office in the Netherlands for many years. Nevertheless, this yielded very little for the Netherlands. This is because the company is taxable in the United Kingdom, where another headquarters is located. This was in agreement with the Dutch tax authorities. Kavelaars is surprised about this. ‘You can only apply Dutch treaties if you are really established here. An empty shell is not enough then.’
Creating substance
However, this will all change if the merger goes ahead. Stellantis wants the Netherlands both legally and fiscally as its head office, but whether this is actually going to happen is not yet certain. ‘This depends on where the effective management is, which in turn depends on where the decisions are actually taken. To have only a letterbox here is not enough,' Kavelaars explains. ‘They really need to create substance here. At the very least, that includes an office, although it does not have to be large. But there really need to be people physically present, not just someone to guard the place.’ There really do have to be administrators living here and something really has to be done.
Little economic use
Another reason why the Netherlands is attractive to the company is the Dutch corporate law. ‘That is also something which is very attractive in the Netherlands compared to other countries. If the company is involved in mergers, takeovers or reorganisations: that is easier here than in other countries,' Kavelaars explains. Economically, however, the arrival of the company makes little difference. ‘After all, they won't be opening a factory here, and the people at the office are of little economic use. The creation of employment lies mainly in the production of cars, but unfortunately that part of the business is not going to come to the Netherlands.’
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The full article from RTL News, 7 January 2020, can be found here (in Dutch).
