Largest companies pay the most tax

The largest companies in the Netherlands have been paying more tax in recent years. In 2010, the very largest Dutch companies still paid relatively the least in corporate tax, but in the following years that share grew substantially. Ten years later, they have become the largest payers proportionally. This is evident from research conducted by Tilburg PhD researchers Jesse van der Geest and Christian Peters.

Christian Peters en Jesse van der Geest. Image: Claudia Marangoni

The accountancy PhD researchers conducted their research as a kind of in-between project, Van der Geest explains. “For our research we usually look at large companies, especially in the United States, which is necessary because we want to publish in the big top international journals. But we considered it a shame that we have so little impact in the Netherlands with this. That’s why we wanted to apply that scientific method to companies in the Netherlands for a change.”

“The idea was: we’ll grab some data and see what comes out of it. A kind of finger exercise but also a way to have an impact. That’s important, in this way, you can give something back to society as a scientist. That’s why we also wanted to write it for a wider audience.”

From smallest to largest

Van der Geest and Peters compared the tax burden of Dutch companies between 2010 and 2020 in four categories from small to very large. They published their findings this week in ESB (Dutch only). The average tax burden for all companies increased from 21.3 percent to 22.4 percent during those years. But while that growth was limited to under 1 percent for the other categories, the very large ones went from relatively the lowest rate to the highest, from 20.1 to 23.6 percent.

Their findings contradict an earlier study (Dutch only) by Statistics Netherlands (CBS). This showed that the tax on profit for these large companies had fallen considerably over the years. This may seem remarkable, but there are many differences between the two studies, Van der Geest explains.

What is going on?

“CBS did that study on behalf of the House of Representatives over the period 2008-2017. They use very different data in doing so. They have data from their own surveys, we use data from the private Amadeus database. We applied methods for this based on the scientific literature; they use other methods. In addition, we looked at the averages, to get a birds-eye view, what is actually going on?”

“In writing the article, we kept telling ourselves: stay objective, make sure you don’t participate in the debate. We are scientists, not politicians. Others may draw their conclusions from the research, for us it was mainly about understanding society, what is going on?”

Translated by Language Center, Riet Bettonviel

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