Many European billionaires choose tiny South Pacific islands to hide their money from the taxman. But there are easier ways: just bring it to the Netherlands, where there are hardly any taxes to be paid on profits.

This reality is now the subject of an open conversation in the Netherlands because in times of recession, with the euro crisis and tight budgets, many Dutch citizens dislike the image of their country as a tax haven for the super-rich and mega-corporations.

Holding companies for corporations like Apple, Microsoft, Google, Ikea, Starbucks and others bring 8 trillion euros to the Netherlands every year to save on taxes – legally – via “mailbox” companies created there. A single office building in Amsterdam, for instance, is the registered mailbox for more than 2,670 companies.

Corporate tax is 20% to 25% in Holland, but is only levied on profit, not intellectual property.

"Jan Modaal" (Dutch for “Average Joe”) on the other hand has to cough up quite a bit; income taxes in the Netherlands are among the highest in Europe, and can amount to over 50%.

Because the Dutch do not tax royalties, the Netherlands is also appealing for musicians like David Bowie and the Rolling Stones who have amassed considerable wealth over the years from sales of records, CDs, and concert tickets. Also registered in the Netherlands is Irish rock band U2 – and lead singer Bono, thus ensuring that however vocal he may be about the poor in Africa he doesn’t have to fork over too much to the state.

Holding companies and multinationals also have the option of making special deals with Dutch tax authorities who are bound by an oath of secrecy. The country’s right-liberal government continues to support the whole system, which brings in over a billion euros a year.

Only The Dutch Pay Taxes

During the 2009 financial crisis, the U.S. put the Netherlands on a tax haven black list but the Dutch were able to persuade President Barack Obama to take the country off the list.

Many Dutch citizens apparently think that was a mistake, as the success of the Dutch book The Tax Haven – Why No One Here Pays Tax, Except You illustrates. In the book, author Joost van Kleef enumerates all the corporate money-saving tricks. "There are a lot of tax loopholes in our country," he writes. "Some legal entities for example don’t have to pay a tax on dividends. And the subsidiaries of huge multinationals registered here pay no or very little tax."

Van Kleef also points out that not only do English pop stars and American Internet giants do business here, but also billionaires from the former Eastern Bloc and top-earning soccer players.

Many rich Greeks also have a presence in the country, like European Goldfields, the Abela hotel chain, Hellenic Land Holdings and Crete Hellas Holdings. Lamda Development, which belongs to the richest man in Greece, Spiros Latsis, is also registered in the Netherlands – even as northern European taxpayers are backing Greece with billions so the country doesn’t go bankrupt.

Ironically, tax accountancy firm Deloitte has published a study according to which the Netherlands in not a tax haven. In the report, Peter Kavelaars, a Deloitte partner and professor of fiscal economy in Holland, makes the point that a reason why many large corporations register in the Netherlands is that withholding tax is only 15%.

But van Kleef doesn’t buy this. “You will find nearly every tax expert who advises the government, parliament, government ministers, somewhere on the payroll of either Deloitte or Ernst & Young – companies earning big time from the Dutch tax evasion paradise," he says.