In a recent interview with NPO Radio 1, Peter Kavelaars, Professor of Economics of Taxation at Erasmus School of Economics, discusses the revelation that very rich Dutchmen often escape tax authorities easily. This applies not only to wealthy Dutch people who have moved to Monaco, but also to rich people who simply still live in the Netherlands.
Rich Dutch people who want to escape the tax authorities often use the same tricks. What often happens is that these rich people sell all or part of their business. The return on this is paid into their account, but the tax authorities assume a notional return of 5.5%. On that 5.5%, the individual then pays tax. However, if you deposit some of that money into another limited company that is also in your name, the money stays there and is taxed less. In this way, the rich in the Netherlands pay significantly less tax.
That this still happens on a large scale does not surprise Kavelaars. However, the professor does say that it increased significantly after the introduction of the new tax system in 2001. Also, the phenomenon described is more common due to increases in the notional return over the past few years.
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You can listen to the full episode from NPO Radio 1, 7 June 2023, here.
