Dutch Shell Companies and International Tax Planning

Arjan Lejour, Jan Mohlmann, Maarten van't Riet, Thijs Benschop

Research output: Working paperDiscussion paperOther research output

434 Downloads (Pure)


This paper uses the financial statements of special purpose entities (SPEs) for explaining the origin and destination of dividend, interest, and royalty flows passing the Netherlands. We find that Bermuda is the most important destination for royalty flows. These flows come from Ireland, Singapore and the United States. For dividend and interest payments the geographical pattern is more widespread. We find a substantial tax reduction for royalties by using Dutch SPEs compared to a direct flow between the origin and destination country. However, we cannot find such tax savings for dividends and interest with an approximation based on statutory tax rates. When controlling for country characteristics in our regression analysis we do find that tax differentials partially explain the geographical patterns of income flows diverted through the Netherlands. This is the case for the likelihood that a route is used, as well as for the size of the flows. This paper is one of the first using bilateral income flows as dependent variables instead of bilateral FDI stocks or flows.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages39
Publication statusPublished - 8 Jul 2019

Publication series

NameCentER Discussion Paper


  • corporate taxation
  • international tax planning
  • treaty shopping
  • bilateral dividend flows
  • bilateral interest flows
  • bilateral royalty flows


Dive into the research topics of 'Dutch Shell Companies and International Tax Planning'. Together they form a unique fingerprint.

Cite this