Robbing Peter to pay Paul

The sleek intercity train connecting Amsterdam to Rotterdam zips between the two cities in a mere forty minutes and, with a fare of only €15.40 (£13.50), puts our fares to shame.

The Dutch railways are still nationally owned, operated by Nederlandse Spoorwegen, and the route between the two cities claims a punctuality record of 100 per cent. But Dutch people have been in uproar over what may be another record, one of the most shameful tax deals in Europe and one that throws the spotlight once again on Ireland’s dubious corporate tax policy.

In recent years the Dutch people have been horrified to discover that while they buy their train tickets from a state-owned company, a significant chunk of the money has been funnelled through Ireland. This is because NS Financial Services, 100 per owned by Nederlandse Spoorwegen, bought the trains, then leased them back to NS, while being incorporated in Ireland. In doing so it has arranged that its profits come under Ireland’s 12½ per cent company tax rate, rather than the 25 per cent prevailing in the Netherlands.

The result? Since 1998 a state-owned Dutch company has paid approximately €177 million in tax to Ireland rather than to the Dutch ministry of finance, even though that ministry is the 100 per cent shareholder of NS and the trains are operating entirely in the Netherlands. A further €1 billion in accumulated profits is understood to be held in Ireland.

Furious Dutch members of parliament have roundly condemned the Dublin structure as unfair tax planning and tax avoidance.