Dhe forthcoming move of the Spanish conglomerate Ferrovial to the Netherlands is fueling the debate about tax competition. Questions also arise in the beneficiary country: politicians from the left-wing opposition want information in parliament in The Hague about possible tax advantages – namely whether one of the controversial special agreements is involved, which the Netherlands can make with individual companies.
Spanish politicians are angry. After the general meeting on Thursday approved the project, Ferrovial – currently with a market capitalization of around 20 billion euros – wants to quickly complete the move to Amsterdam and go public there – which is intended as a stepping stone to the New York Stock Exchange.
taxes and laws
In general, two aspects play a role in the location debate in the Netherlands: on the one hand, the tax issue, after favorable laws had lured companies with their legal domiciles to the country for many years. The Amsterdam Stock Exchange is also attractive due to less complicated regulation by regulators, according to capital markets lawyers. On the other hand, the fifth largest EU economy has recently suffered spectacular group exits: The oil company Shell and the consumer goods supplier Unilever gave up the Dutch part of their dual headquarters and are only based in London.
After the merger with Swiss competitor Firmenich, the chemical group DSM is to have its legal headquarters in its home country. The hydraulic engineering specialist Boskalis – known for its rescue operation for the damaged container ship Ever Given in the Suez Canal – has been thinking aloud about moving. Each case is different; but business representatives have been increasingly complaining about an anti-corporate mood in the country. “In general, I’m worried about the climate at the location,” said the right-wing liberal Economics Minister Micky Adriaansens in an interview with the FAZ
Tax benefits are denied
But now another major foreign corporation is coming with its headquarters, just as Airbus is legally based in Leiden. Ferrovial, which had already begun to relocate activities from London to Amsterdam after Brexit, denies tax advantages as a motive. The main goal is the North American market and the further internationalization of the business. In addition, Ferrovial mentions the triple A rating of the Netherlands and the legal security that the country offers. “The taxes that Ferrovial will pay after the transaction will be very similar to those that it pays before the transaction,” said Chairman of the Board Rafael del Pino – himself a 20.4 percent shareholder – at the AGM. They will continue to pay taxes in Spain, according to their own statements, it was 282 million euros last year.
Ferrovial did not comment on an analysis by the Spanish Sabadell Bank, which was reported by the local media in March. According to this, the move could mean bureaucratic costs of around 20 million euros, but also 35 to 40 million euros in annual tax savings – because in the Netherlands dividends from subsidiaries are tax-free and in Spain this tax relief is limited to 95 percent. The operating result most recently amounted to 728 million euros with annual sales of 7.5 billion euros.