European tax proposals under scrutiny: Hans van den Hurk advises Dutch Parliament

The Dutch House of Representatives regularly has to make decisions on complex European proposals. To better understand their potential impact, Members of Parliament (MPs) can seek advice from researchers. One way of doing this is through a ‘Scientist’s assessment of EU proposal’, in which researchers examine the potential impact of European proposals on the Netherlands. These assessments are organised by Parlement & Wetenschap (Parliament and Science), which operates under the auspices of the Royal Netherlands Academy of Arts and Sciences (KNAW). Researchers examine what European proposals could mean specifically for the Netherlands. Van den Hurk and De Wilde carried out the first EU Science Assessment in the field of taxation. To do so, they studied documents from the European Commission and publications relating to the proposal.

Simpler rules, but at what cost?

The European Commission wants to reduce the administrative burden on businesses and make it easier to invest across Europe. According to the researchers, several of the proposed measures could benefit Dutch businesses, pension funds and other investors. Van den Hurk also sees positive aspects to the plans. He believes that some of the proposed simplifications to tax rules are worthwhile and relatively inexpensive.

At the same time, other proposed changes could come at a significant cost to the Netherlands. According to Dutch government estimates, the country could lose approximately €3.6 billion in tax revenue each year as a result. There could also be benefits, such as increased investment and reduced administrative burdens. However, according to the researchers, the scale of these potential benefits remains unclear. Van den Hurk is therefore critical of the proposal as a whole. Given its high costs, he describes it as a "no-go". Still, some elements (simplifications) can be introduced since they are logical and not expensive.

Who benefits and who pays?

The researchers also highlight potential risks to efforts to combat tax avoidance. For example, the European Commission wants to abolish an existing measure designed to prevent companies from exploiting differences between national tax systems to obtain certain tax advantages. Van den Hurk is concerned that this could make previously restricted tax avoidance arrangements attractive again. The researchers also draw attention to how the costs and benefits would be distributed. Which businesses and organisations would benefit from the changes? And which countries since some of them will benefit from the proposals. And who would ultimately bear the consequences if the government received less tax revenue?

From research to political decision-making

Van den Hurk and De Wilde's findings are presented in the EU Science Assessment Omnibus on Taxation. The researchers advise the Dutch House of Representatives to carefully consider the financial and wider societal implications of the proposals. MPs can use the findings to put questions to the Minister of Finance, who can then raise them with the European Commission.

Through his contribution to the EU Science Assessment, Van den Hurk demonstrates how academic expertise from our faculty can be applied to societal and political issues. His expertise helps shed light on the potential consequences of European tax proposals for the Netherlands.

More information

The EU Science Assessment Omnibus on Taxation and the accompanying documents are available via Parlement & Wetenschap (in Dutch).