Left-wing ‘exit tax’ plan risks making the Netherlands a pariah state

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The problem is that an exit tax will cause enormous damage to any country that imposes one. Let’s put aside for the moment the fact that the tax is almost certainly illegal under European law, and will be overturned after a few years of litigation in the courts. Let us also leave aside the fact that it is essentially a retrospective tax, and nearly all developed countries have always banned it on the grounds that people and businesses have the right to know what charges they will be charged. potentially confronted before settling their affairs, not after. .These are all serious points. But the real problem is, why would a business or entrepreneur want to settle in a country that behaves like this? Taxes can be increased anywhere and to a level you no longer find acceptable, but you still have the option of moving elsewhere. It can be inconvenient and expensive, but it is an alternative if the taxes get too outrageous. The Dutch are considering closing this door. You can never leave, at least not without paying a huge fine. We can tax you over and over again, and there’s nothing you can do about it. It is certainly unacceptable. Of course, the government can raise a few billion. But it will lose tens and tens of billions of all the companies that decide to locate elsewhere. Is it a good job? Not really.

Ultimately, the Dutch can keep at least half of Unilever. But they will have cast away their reputation for loyalty, treating businesses with kindness, and seeking compromises between different interests.

For businesses and entrepreneurs, the Netherlands will become a pariah state, best avoided because you never know what kind of taxes they are about to impose on you. It is a very high price to pay. Even for € 11 billion, it’s hard to believe it’s worth it – and it just might turn out to be one of the costliest policy mistakes of recent times.

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