Belgium far more transparant than Luxembourg and the Netherlands

Luxembourg

In April I visited Luxembourg to discuss progress against tax avoidance. Believe it or not, Luxleaks has triggered some serious changes in the country, and there’s even the start of a real public debate with the media covering various perspectives.

The biggest change, of course, was a complete overhaul of the tax ruling practice. Within two months after the first Luxleaks publications, Luxembourg passed new legislation to reform it. The new law provides for publication of advance tax agreements, in summarized and anonymous form, in the annual report of the tax administration:Implementation took quite a bit longer. The report for the year 2015 did not yet include info about tax rulings. The first data are in the 2016 report, which has recently been published, and the level of public transparency is rather disappointing. The report mainly describes developments in the total number of rulings.

It also lists some 30 different topics and legal articles covered in rulings applications. However, the report does not provide further details and does not even mention how often each topic appeared in ruling applications. This is not nearly enough to reassure critics.

The Netherlands

Meanwhile, in the Netherlands, the government was forced to publish a previously undisclosed report about advance tax agreements. This triggered a debate in parliament, and state secretary of finance Wiebes committed to publish examples of all main types of rulings and the number of applications per type. That’s just a little bit more than Luxembourg.

Belgium

Now compare this with Belgium. The detailed info below, from the 2016 report of the Belgian tax rulings unit, shows that our Southern neighbours are light years ahead.

The report includes 20 pages with detailed descriptions of individual tax rulings that were approved during the year. The descriptions are completely anonymous, yet provide a clear explanation of the company-specific arrangements and circumstances. Although they are grouped by type, all cases are different. (Otherwise there would be no need for a ruling…)

And then there are another 45 pages – yes, FORTY-FIVE – with details on ruling applications that had been rejected.

Still some way to go towards real transparency for Luxembourg and the Netherlands. But if Belgium can do it, so can they!