It is an interesting day, when you get the message that the courts demand the prosecution of the Ministry of finance. Yes, we could feel that a brand new day in the moments of out entertainment will be revealed. It is only 6 days until the feast of Saint Nicholas in the Netherlands; yet, it is already an issue that state secretary Eric Wiebes and minister of Finance Jeroen Dijsselbloem could be regarded as naughty boys, with all the trimmings of lessened sweets and candy (at http://nos.nl/nieuwsuur/artikel/2006257-gerechtshof-eist-vervolging-ministerie-van-financi-n.html).
So what happened?
Well, it goes back to 2009, a tipper sold to the tax office a list of those who were ‘hiding’ their savings in Luxembourg to avoid the Dutch wealth tax. This is a tax that you pay over wealth that you accumulate, you get to save 21,000 euro, a couple can safe tax free 42,000 euro, so above that, you get to pay taxation. The amount is achieved as follows: The tax office takes a position of assumption, that you make 4% over that wealth (in ways like profit or interest), over that profit, 30% taxation is due, so basically, you end up paying around 1.3% over your taxable wealth. It is the Dutch way of showing that saving your wealth is not a good idea, so people left this money in other places, many in Luxembourg. So at this point, the issue gets a little murky.
You see, those ‘black savers’ (from the Dutch word zwart spaarders) demanded in court that the tax office released the identity of this tweeting canary, so that the reliability could be established. The courts agreed on this, and here we have it. Even though the Ministry of Finance did not appeal the issue, they have thus far remained silence on the identity.
Here is my first issue: Was there tax avoidance or not? Either these people have found to be guilty to have funds across the border, or they are innocent. The identity has little or no bearing here, which only seems to make sense in criminal pleads.
So as the courts again demanded the identity of Mr (or Mrs) blabs-a-lot, we get a new issue. The two civil servants remain silent. They claim to have been given instructions not to talk. Yet, these two civil servants are not beyond the law and as such they have no right to remain silent. So what is at stake?
The only quote we have here is the quote “there are other interests in play and there has been tuning towards the choice of actions on the highest levels”, according to the attorney representing the tax office.
So is this about 1-2 billionaires? Because the penalty of the evaded ‘donation’ could be as high as 300%, which means that it will represent a massive bill. This case is all about the money, but about whose money is this? The tax office, as some might decide to walk away taking all their business outside of the Netherlands?
Whatever we speculate, in the end it will be what will happen to these two civil servants and whomever gave the instructions, reason here is that the influencing of witnesses could be rewarded with 4 years in a less comfortable Dutch hotel (read prison).
Yet this song and dance is also showing another side and perhaps another trial. You see, why was the identity of the informer needed? Truly, does this give value to the statement? Let’s not forget the Dutch government could just seize 100% of those accounts, after which those who decided to ‘black save’ will be left with nothing, which is not fair, but it shows another side, these people chose to place their fortunes out of taxation ways, there will be a consequence to that. In addition, if the informer ends up getting harmed, will the court be liable for endangering lives? Is it so far-fetched that the person not getting away with his/her 12 million euro tax bill, that they might take it a little personal?
That will be a discussion for later, yet consider the action as the news of June 10th 2014 revealed (at http://nos.nl/artikel/659185-7500-zwartspaarders-melden-zich.html), where we see that 7500 people reported themselves with illegal savings outside of the Netherlands (to avoid the 300% penalty fee). It seems that these ‘savers’ had well over 4 billion in foreign savings, which is now getting the tax office another 75,000 euro per person, which is a serious amount of money. Yet that information does not seem to be used, how many names have proven to be correct is also a factor, because, no matter how we feel about the act, those who learn the identity of the person costing them 75,000 euro’s might get hunted down, then what will happen, more important, will those who passed verdict be safe from prosecution themselves at that point?
So is revealing the name of Mr Insider correct? Legally yes, but morally?
Yet, we now get to part two of all this, you see, the hunt for the illegal tax sheltering saver is only the tip of the iceberg. As we see nations and taxation make new options, or even heralding other investors, we see that there is a chance that the people by large will be endangered because of this.
For this, we need to consider what I wrote earlier this week in regards to ‘The reality for poor London’ as it was published on November 24th and how there is now a larger danger to the people in Hackney, due to the changes as brought by Westbrook Partners. There it was a mere 99 apartments; in the Netherlands we now see that Round Hill Capital is purchasing almost 3800 apartments for a mere 365 million euro, which means the dumping of apartments for less than 100,000 euros each. This is not the first time that this happens in the Netherlands, last June well over 1500 apartments were sold for 180 million Euro (at http://nos.nl/artikel/2006203-britse-investeerder-koopt-3786-nederlandse-huurhuizen.html), it seems to me that this shifting of funds all over Europe has a second view. Not only are the people facing dangers down the track, the question is that people have been under pressure for living as the cost of living had become almost unbearable, now we see that well over 5300 apartments are now under the watchful eyes of an investment firm. When we regard Hackney and the upcoming 99 evictions, what dangers will these tenants face when the economy might take the smallest turn for the better?
On one side we see people running their savings out of the Netherlands, on the other side we see more insecurity as investment firms are taking a leap to lower yielding fields, what happens when the apartment field is no longer yielding enough? Who gets to deal with that mess then?
I can decently guarantee you that those enabling the current transfer of ownership will not be available for comment at that point.