Bedrijvenconferentie Montreal

Toespraak | 12-06-2012

Ladies and gentlemen,

it gives me great pleasure to start a conversation with you today about business opportunities and investments in The Netherlands. Let me kick off by telling you something about where we are

in regards to the European economy. I can imagine that from this side of the pond Europe must seem to be in ever deepening crisis and worsening turmoil. It’s true we’ve had very few dull moments the past 24 months. This weekend was another example: Eurozone ministers have been working towards a solution for the struggle of Spain with its financial sector. They reacted positively to the intention of the Spanish government to seek financial assistance from their fellow member states.  

During the past two years Greece, Italy, Spain, Portugal and Ireland have found themselves in grave circumstances. This has led to unrest on the financial markets. However, the leaders in Europe are unified in working towards a solution to solve the problems and prevent them from happening again. Our solution is threefold:

·       One, the countries of the Eurozone have signed up to taking tough measures to restore and maintain budgetary discipline. Those that fail to comply, will face hefty fines.

·       Two, all countries are committed to reforming their economies and make them weatherproof for coming storms.

·       Three, we’ve created an emergency fund of 1000 billion dollars. This fund will act as a firewall to prevent possible future problems from spreading to other countries.  

 Of the countries in trouble, Ireland leads the field with reforms. In Italy, Mario Monti’s government has earned respect with its competence and honesty, not least from the financial markets.

It will take time for us to repair the damage, but reparations are underway and already we see signs of recovery. Several EU member states – including The Netherlands – are implementing tough austerity measures. The overall consensus is that we need to fix our finances. I have great hope that we will restore, reform and strengthen our economies with this combined effort. But I’m not one who relies just on feelings of hope. As state secretary of Finance I rely on facts. So let me give you two:

Fact one, the Eurozone is not in recession. This says a lot about the strength and resilience  of the European common market.

Fact two, Germany’s economy – the largest and most important in Europe – grew by 3 percent last year. Businesses there are in need of employees. So much so, that companies in the southwest of the country are hiring people from Spain and – well, basically from anywhere.  This is also excellent news for businesses in The Netherlands as Germany is our most important market and biggest trade partner. Together with Germany and the Scandinavian countries, The Netherlands forms a strong region of the EU. I’ll admit that we’ve had some luck with our geographical position. We lie in the very heart of Europe. 500 km from London; 650 from Berlin; 500 from Paris; 200 km from Brussels.

In addition to this excellent geographical position, we can get to these major cities fast. Our infrastructure is world class, our logistics industries are top of the bill. The harbour of Rotterdam is the largest in Europe and the third largest in the world. Schiphol international airport is one of Europe’s finest. Last year some 440 000 planes carrying 50 million passengers used Schiphol. It was named best airport in the world seven times over. 170 million consumers live, work and spend within a radius of 500 kilometres from our capital. We truly are Europe’s gateway. But besides all the impressive numbers and superlatives, about geography, airports and harbours, the Dutch are simply a fine bunch of people! Hard working, highly-educated and multilingual. We enjoy a high and pleasant quality of life in a business friendly environment. We know when to buckle down... We know when to enjoy the fruits of our labour, spend time with our families, enjoy the arts and support our favourite sports teams. And our hard work pays off. At the start of the year our trade surplus grew by 1,2 billion euro’s to a total of 4,1 billion. Our annual export increased ten percent in the last 12 months and is now valued at 35,3 billion euro’s. What all these numbers tell us is that our economy is strong and resilient. We are a small nation of roughly 17 million people. In square kilometres, Quebec dwarfs us 36 times. We’ve had to – and will have to – bear some of the burden of Europe’s debt crisis.  

And yet, we did not bend,

we do not buckle

and we will not break.

To a large degree, this favourable outcome has to do with our tax legislation and the attitude of our tax authorities. The Dutch tax authority has always been open to dialogue and ready to work together with businesses. We realise that all companies – from the family-owned and medium-sized enterprises to the multinational corporations – are the lifeblood of our economy.

The multinational supermarket operator Ahold started out as a corner shop in a small Dutch city. And the Dutch companies Shell, Philips, AkzoNobel, ASML, ING and Unilever have also done very well at home and abroad – including here in Canada. But no matter the size, they all have two things in common: All need to pay their fair share. None need to be hassled by bureaucrats.  

As state secretary for Finance, I am responsible for the tax policy and for overseeing our tax authority. And I am proud of our business friendly tax system and of the reforms of the past years.

We lowered our corporate tax rate from 35 to 25 percent. We have a favourable participation exemption. The Netherlands was one of the first countries to introduce this exemption over a century ago. And a fiscal unity regime for a tax consolidation of group companies. As a result profits and losses can be freely offset among group members. To encourage international investments, we have a wide tax treaty network which reduces withholding tax on dividends, interest and royalties. Also, Dutch legislation does not require withholding tax to be levied on outbound interest and royalties.  Foreign employees enjoy a 30 percent cost deduction. We encourage research and development in The Netherlands with an allowance for R&D wage costs. We also give an allowance for R&D operating costs and investments. But it’s our so-called innovation box which gives innovative businesses a really great deal: profit derived from research and development in The Netherlands is taxed a mere 5 percent. I would like to note that the men and women of the Dutch Tax Authority realise running a business is hard enough as it is without having bureaucrats breathing down your neck. They maintain a cooperative attitude towards taxpayers and aim for a relationship based on: trust, transparency and mutual understanding. This has led to enhanced relationships and a continuing dialogue between tax authorities and businesses which gives entrepreneurs a degree of certainty about possible future tax issues. As a result, fewer checks fterwards are necessary and paperwork and costs are reduced. According to the World Business Forum the total sum of these measures puts us in seventh place on the global list of competitive economies. And two months ago Bloomberg ranked us globally as the second best country to do business with! In Europe, we are better than average. We are constantly tweaking the tax system to ensure it stays up to date, efficient and helps businesses grow. My current tax agenda is based on three main principles:

-         The system needs to be simpler;

-         More robust;

-         More fraud proof.

Furthermore, I would like to shift taxation from labour to consumption, lower tax rates by broadening the base, abolish small revenue tax and encourage more people to not only think like entrepreneurs but be entrepreneurs. The next speaker will go into more detail about the Dutch tax system, so I shall leave it at that for now. The Netherlands, ladies and gentlemen, has been, is and always will be a nation dependent on solid relations with other countries. From our early beginnings we have thrived on trade across oceans and seas. And we have always invited others to set up shop in our country. Since last year our country boasts headquarters  from 819 foreign companies.  With regards to Canada: We are your second largest investor. You our thirteenth...

Our combined trade volume totals annually at 5,5 billion euro’s – or 7.3 billion Canadian dollars. The state of Quebec is our largest trading partner in Canada with a volume of 2.3 billion dollars.

We sell you beer, vegetable seeds, oil and flower bulbs. You sell us oil, nickel, aluminium and coal. Trade is good, but it can be better. There are still so many opportunities. As is always the case in business. But you as entrepreneurs know this better than I. I look forward to continuing this conversation and to welcoming you to The Netherlands.

Thank you for time and hospitality.