Contributing to a sustainable tax system

Everyone has to deal with taxes. Rules tend to change regularly, and the tax system can be perceived as complicated. PwC wants to help improve the system and make it comprehensible, by sharing knowledge about existing laws and regulations, and by sharing ideas about what can be changed or done differently.

Research on tax contributions from Dutch businesses

The business climate is the subject of social debate. It is therefore all the more important to conduct this debate on the basis of facts and figures. During the debate on the 2024 Tax Plan, the Senate asked how much tax the largest companies in the Netherlands pay. The Minister of Finance indicated that these insights are not available in the short term. That is why PwC has sought out the missing information and made it available through the report 'The total tax contribution of the Dutch business community in 2023'. PwC will repeat this research annually. The results have been shared with the Parliamentary Committee for Finance and discussed with members of parliament, civil servants and other stakeholders.

Research on how working more can actually pay more

The labor market shortage is large. PwC previously calculated that the gap between supply and demand on the labor market almost disappears if part-time workers work four extra hours per week. It sounds simple, but isn't. Working more and therefore having more income can be quite disappointing in the bottom line. The marginal pressure, the tax rate you pay on your last earned euro including loss of allowances, is high and also not transparent. That is why PwC has devised a different system in which the tax rate is no longer linked to the total annual salary, but to the hourly wage. This means that working more does pay off. The idea has been discussed with members of parliament and other stakeholders and shared with the Ministry of Social Affairs and Employment via an internet consultation.

Combination of PwC and academic position

Various partners and employees of PwC combine their position at PwC with an academic position. This means that, in addition to their role at PwC, these employees also work at a university as (endowed) professors, lecturers or researchers, for example.

PwC encourages such a combination of roles, as it allows our partners and employees to contribute to society by sharing their practical experience, knowledge and skills, alongside their work for PwC. This is in line with our ambition of building trust and creating sustainable progress.

Combining an academic career with another professional career in general, and within tax law in particular, is part of social debate. We believe it is important to be transparent about why we are in favor of combining these functions, what guidelines we apply and which individuals are involved.

A foothold for new tax policy

The Dutch tax system has not kept pace with the challenges being faced by society, such as increased inequality, climate change, an ageing population and new business models. In practice, this leads to bottlenecks. PwC wants to offer a firm foothold when resolving these bottlenecks. In October 2020, PwC sent a document called ‘A foothold for new tax policy’ to the Parliamentary Committee for Finance. This was the first response to the report ‘Building blocks for a better tax system’. In addition, in May 2020, PwC shared its vision about the taxation of multinationals.

PwC also conducts research under instruction from the Ministry of Finance. For instance, we conducted research into the availability of data for a box-3 levy based on actual returns, we identified how various countries tax multinational companies and we investigated how various countries deal with conduit companies.

Delta plan Taxation for a Circular and Social Economy

In February 2021, independent think-tank The Ex’tax Project presented a delta plan for tax reforms. The plan was realised by Ex’tax in collaboration with Deloitte, EY, KPMG and PwC, and was presented to the government. The report shows that if taxation shifts from employment to pollution and consumption, it will be possible to cut CO₂ emissions and reduce the use of raw materials. Based on the basic principle that ‘the polluter pays’, an extra 23 billion Euro can be generated to reduce employment-related taxation for households and employers. A second report was released in 2022: ‘The taxshift’. This study explores how financial incentives in the tax system could support an inclusive circular economy. Edwin Visser and Niels Muller helped to compile these reports on behalf of PwC.

Corporate Tax Governance

The global landscape for taxation and regulation is changing quickly. Not only due to changes in legislation, but also due to changes in fiscal control regulations, codes of conduct, countless international initiatives about fiscal transparency, and measures against tax avoidance. All these changes fall under Corporate Tax Governance: formulating a long-term tax strategy, clear roles and responsibilities, fiscal risk management and fiscal transparency. PwC compiled a brochure called ‘Corporate tax governance. Creating a sustainable tax approach in times of fundamental change’ and regularly organizes stakeholder sessions on this topic.

PwC reactions to consultations European Commission

The world of taxation is continuously changing. For example, in recent years, this involved taxes on the digital economy, the exchange of taxpayer information between countries, and the definition of ecologically sustainable investments (EU Taxonomy). These developments are partly being shaped by the European Commission by modifying existing guidelines or developing new guidelines. PwC has responded to various consultations by the European Commission.

Tax Transparency Benchmark

Transparency about taxation is important. That is why the Dutch Association of Investors for Sustainable Development (VBDO) and PwC work together to compile the ‘Tax Transparency Benchmark’. We have been doing so since 2015. The results of the 2023 edition show that Dutch and European listed companies are now more fiscally transparent than the year before.

Fiscal strategy and code of conduct PwC Netherlands

PwC advises clients about taxation and uses the ‘Tax Transparency Benchmark’ to assess the fiscal transparency of companies. Naturally, we are also open in this regard. That is why we have published our fiscal strategy and fiscal code of conduct. This allows us to give our advisers a foothold.

Social Ltd.

Social enterprises combine their pursuit of social impact with a healthy business model. We believe in their capabilities. That is why PwC helps social enterprises by sharing its knowledge and expertise - pro bono and during work hours. We also support these companies individually, and can see which issues they encounter e.g. from a legal perspective. That is why PwC laid the foundations for a social Ltd. and shared these ideas with the Secretary of State for Economic Affairs and Climate. PwC professional Pjotr Anthoni also took part in a Social Ltd. expert group for the same Ministry.

Investigations childcare benefits and fraud signaling facility

Under instruction from the Ministry of Finance PwC has reconstructed the timeline of the memo Palmen. This memo is about childcare benefits. PwC also examined the fraud signaling facility (FSV) of the Tax and Customs Administration, resulting in several reports (1, 2, 3).These studies have been discussed in parliament.