Question marks on the tax hike of the retired Secretary of State Idsinga

• Jan Kleinnijenhuis

  Nieuwsuur reporter

• 

  Thomas Spekschoor

  a reporter

Folkert Idsinga, the NSC State Secretary for Finance who resigned today, invested in an algae company for his political career. That investment was so attractive from a tax point of view that he could immediately get more money back from the Tax Authorities than he invested himself. Tax experts call the acquisition fiscally aggressive.

There have been questions for some time about the investments of Folkert Idsinga, who made a huge fortune during the 25 years he worked as a tax consultant in Zuidas Amsterdam. In total, he has more than 6 million euros in shares and savings, but he did not want to reveal how much he invested.

In the past few months, the investigative editors of the NOS and Nieuwsuur investigated an investment made by the creator Richard van Zwol. it was mentioned by name. This is related to a majority interest in the company Algaerator 906 BV. Idsinga made the investment in 2019, before he became politically active.

The company Algaerator 906 manages one or more devices for growing algae. Since the algae can be used instead of animal proteins and fatty acids, the tools are eligible for attractive tax incentive schemes, which aim to encourage environmentally friendly investments by entrepreneurs.

In his explanation of it to resign Idsinga spoke regularly today about himself as an entrepreneur. And it is precisely that term that tax experts question. Because Idsinga is an entrepreneur here? Or an investor? The answer to that question is important, because as an entrepreneur Idsinga deserves a substantial tax subsidy. Not as an investor.

“What you often see is that investors use a tax deduction for entrepreneurs with the help of a complex tax structure,” says Martijn Nouwen, assistant professor of tax law at Leiden University. this with investors, who are often wealthy, to get a lot of tax back.”

This is because they receive a deduction, which means they have to pay less income tax. The acquisition can be so attractive that investors get more money back than they invest themselves.

“The law is very broad,” says Nouwen, “which opens the door to all kinds of tax structures and aggressive investment products that use those kinds of discounts.”

The acquisition has caused many headaches for the tax authorities in recent years. Before that, investments in cruise ships, solar panels and machine processing plants were made in the same way. After that, the tax authorities tried to dispute many of these discounts, but that was not easy. The burden of proving that there is no entrepreneurship rests with the tax authorities then.

Despite the question of whether the acquisition is legally allowed or not, the Secretary of State should not get involved, said tax law professor Jan Vleggeert from Leiden University. “I really think the Secretary of State for the Finance should not be in this kind of structure. Although he may think it’s fine.”

“I think there is tax avoidance here,” says Vlegeert. “The allocations are aimed at encouraging environmentally friendly investments by entrepreneurs. Here they are sold as an investment product to wealthy private individuals. Although the average Dutch person with a normal salary and some savings on this.”

Already in June, NOS and Nieuwsuur contacted Idsinga about the investment, even before he took office as Secretary of State. In response, he said that a consultation was held beforehand with the Tax Authorities “to ensure that the rules were correctly explained and that they would be complied with.”

Agreements are recorded in writing in what is called managementIdsinga said at the time. “The tax authorities looked at everything afterwards and decided positively,” he said. The Tax Authorities said they were unable to answer questions about individual taxpayers.

Vleggeert says that such an agreement with the tax authorities is “special” and wonders “why the Tax Authorities are cooperating with this”. “And if that is true, I would like find out what other properties there are and under what conditions the Tax Authorities cooperate with them.”

In the past few weeks, the Ministry of Finance has been contacted several times to ask questions to Idsinga about the acquisition and for a background discussion. The Secretary of State was unwilling to do so.

While explaining his resignation, Idsinga categorically denied that his resignation was related to the questions about his investment in the algae company. He called the classification of his investment as tax avoidance “nonsense”.