‘Aruba tax paradise for American defense’

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‘Aruba tax paradise for American defense’
8 Maart, 2010, 08:06 (GMT -04:00)

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ORANJESTAD/THE HAGUE — Dutch parliamentarians of the PvdA-party have presented questions to the Minister of Finances and Defense State-Secretary on an article in Vrij Nederland mentioning that Aruba is a tax paradise for American defense companies.

The article is based on the report Defense Contracting of the US Government Accountability Office (GAO), which controls the expenditures of governmental institutes. From abovementioned report it appears that a large number of American defense companies, amongst which, Lockheed Martin (builder of the JSF), Boeing, General Dynamics (builder of the F-16) and General Electric channel revenues through mailbox-firms to prevent paying tax on these revenues in their own country. The American defense ministry Pentagon supposedly also uses similar offshore companies to evade taxes. According to GAO, the companies collectively have approx. 1200 mailbox-firms.
The PvdA Chamber-members Paul Tank, Angelien Eijsink and John Leerdam want to know from the minister and the state-secretary whether there are actually mailbox-firms on Aruba, the Netherlands Antilles or also in the Netherlands. The parliamentarians also request information on products, which the Netherlands purchase from the defense companies mentioned in the report. In addition, they ask whether the Netherlands currently profit from pending quotations with these American companies. This specifically applies for the Joint Strike Fighter (JSF) and the savings gained by involved companies such as Lockheed Martin and the Pentagon by establishing subsidiaries and/or mailbox-firms in tax paradises.
Finally, the Chamber-members want to know to what extent tax constructions via mailbox-firms and subsidiaries within our Kingdom influence decisions in the Dutch acquisition policy for defense material.
The report also reveals that the number of offshore companies has increased from approx. 900 to 1200 between 2003 and 2008. The largest increase regarded, amongst others, on Aruba. According to GAO, the foreign companies are also being established, as this seems to be the only way for the defense companies to land the export orders. One of the defense companies for example states that it had established a subsidiary in the Netherlands in order to obtain a contract with the Dutch government.



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