«This briefing looks at the role that the Netherlands plays in reducing the tax payments of Portuguese multinational corporations (MNCs) in Portugal. FDI statistics show that the Netherlands is the largest investor in Portugal and the Netherlands receives most Portuguese investment. These capital flows are largely related to activities of Dutch mailbox companies, which enjoy tax benefits in the Netherlands. This results in the shifting of profits from Portugal to other jurisdictions and an overall reduction of companies tax payments.
To illustrate how these tax benefits work, the briefing analyses the case of Portugals largest energy company, Energias de Portugal. The case of EDP in particular shows how the Netherlands makes special secret deals (Advance Pricing Agreements or Advance Tax Rulings) with foreign companies that lead to double non-taxation.