Tax Avoidance — Methodology for Quantification and the Case of the Netherlands

Marco Kerste, Barbara E. Baarsma, Jarst Weda


The goal of this paper is to define and quantitatively measure tax avoidance. So far any rigorous assessment of financial flows related to tax avoidance that entails paying (almost) no taxes, is lacking. This prevents a proper assessment of the necessity for further regulation to fight such undesirable tax avoidance. Quantifying tax avoidance provides a sound starting point for assessing the severity of regulation – matching the expected benefits with costs – and sheds further light on the possible design of effective regulation. The paper defines tax avoidance as the legal use of tax constructions aimed at paying (almost) no taxes in the entire international financial chain. Our paper shows that in order to prevent international tax systems from being used for such double non-taxation, governments could introduce a withholding tax on outgoing interest and royalty flows to low tax jurisdictions (tax havens). If the low tax threshold is set at 15% or 10% respectively, then depending on the choice for one of the two provided definitions of ‘low tax jurisdiction’, we find that the combined outgoing royalty and interest flow related to tax avoidance via Dutch conduit companies was on average 9.7 or 11.9 billion euro per year in the period 2009-2013.

Full Text:




  • There are currently no refbacks.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

International Journal of Law and Public Administration   ISSN 2576-2192 (Print)     ISSN 2576-2184 (Online)

Copyright © Redfame Publishing Inc.  

If you have any questions, please contact: