June 26, 2019

Dutch Shell Companies and International Tax Planning

This paper uses the financial statements of special purpose entities (SPEs) for explaining the origin and destination of dividend, interest, and royalty flows passing the Netherlands. We find that Bermuda is the most important destination for royalty flows.

These flows come from Ireland, Singapore and the United States. For dividend and interest payments the geographical pattern is more widespread.

We find a substantial tax reduction for royalties by using Dutch SPEs compared to a direct flow between the origin and destination country. However, we cannot find such tax savings for dividends and interest with an approximation based on statutory tax rates.

This Discussion Paper reports research on the financial flows already presented in the CPB Policy Brief of 24 January 2019: Conduit country the Netherlands in the spotlight.