Washington, DC – National Foreign Trade Council (NFTC) President Bill Reinsch today sent a letter to Dutch Finance Minister Wouter Bos, and State Secretary for Finance Jan de Jager, cautioning the Netherlands against introducing German-style interest deductibility restrictions.
“Our members are concerned that overly restrictive rules on interest deductibility will prevent them from growing their businesses in an efficient way,” said Reinsch. In the letter, Reinsch also pointed out that raising debt is essential for growth in both local and multinational companies.
“We believe that a country is entitled to protect its tax base, specifically from artificial stripping of that base. However, a country’s tax system needs to take into account the importance of debt to the growth of both national and multinational companies,” wrote Reinsch. “Also, decisions should only be taken on the basis of hard evidence of what is occurring. A recent U.S. Treasury Department study showed that, contrary to expectations, companies were not (apart from a very small category of specific types of companies) using interest to reduce the U.S. tax base. We do not believe the situation in the Netherlands is any different from that in the United States.”
Reinsch also noted that the Netherlands has greatly benefited from substantial amounts of foreign investment because of its reputation as a stable and welcoming place to business. “We urge the Dutch government not to throw away its hard won reputation, built up over decades, for being a good place to do business by the hasty introduction of these rules,” Reinsch concluded.
To read a full copy of the letter, please visit: www.nftc.org/default/tax/Letter%20to%20Dutch%20Finance%20Officials.pdf
The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York