That multinationals spend a lot of effort to move their corporate profits around to avoid taxation is not in question: The famed 'Double Irish With a Dutch .

The Dutch tax authority signed tax agreements with 539 companies in 2016, almost 100 fewer than in 2015, Secretary of State for Finance Eric Wiebes .

However, tax treaties with European countries including The Netherlands, France, Spain and Sweden do not have this. Many French banks have been .

Politics of the Netherlands

2de kamerThe Politics of the Netherlands take place within the framework of a parliamentary representative democracy and a constitutional monarchy. The Netherlands is described as a consociational state. Dutch politics and governance are characterized by a common strife for broad consensus on important issues, within both the political community and society as a whole.


The constitution lists the basic civil and social rights of the Dutch citizens and it describes the position and function of the institutions that have executive, legislative and judiciary power.

It should be noted that the constitution of the Netherlands is only applicable in the European part of the Kingdom of the Netherlands. The Kingdom as a whole has its own Statute, describing its federate political system which also includes the Caribbean islands of Aruba and the Netherlands Antilles.

The Netherlands do not have a Constitutional Court and judges do not have the authority to review laws on their constitutionality. International treaties and the Statute of the Kingdom, however overrule Dutch law and the constitution and judges are allowed to review laws against these in a particular court case. Furthermore all legislation that is not a law in the strict sense of the word (such as policy guidelines or laws proposed by provincial or municipal government) can be tested on their constitutionality.

Amendments to the constitution must be approved by both Houses of the States-General twice. The first time around, this requires a simple majority of fifty percent plus one vote. After parliament has been dissolved and general elections are held, both Houses must approve the proposed amendments with a two thirds majority.


The Netherlands have been a monarchy since March 16, 1815, and have been governed by members of the House of Orange-Nassau ever since.

The present monarchy was originally founded in 1813. After the expulsion of the French, the Prince of Orange was proclaimed Sovereign Prince of The Netherlands. The new monarchy was confirmed in 1815 at the Congress of Vienna as part of the re-arrangement of Europe after the fall of Napoleon Bonaparte. The House of Orange-Nassau were given the present day Netherlands and Belgium to govern as the United Kingdom of the Netherlands. Between 1815 and 1890, the King of the Netherlands was also Grand Duke of Luxembourg.

The current monarch is Queen Beatrix. The heir apparent is Willem-Alexander, her son.

Constitutionally, the Queen is head of state and has a role in the formation of government and in the legislative process. She is ex officio chair of the Council of State, which advises the cabinet on every piece of legislation, she also has to co-sign every law. Although the Queen takes these functions seriously, she refrains from exerting her power in these positions. The Queen also plays a central role in the formation of a cabinet after general elections or a cabinet crisis. Since coalition cabinets of two or more parties are the rule, this process has influence on government policy for years to come. She appoints the (in)formateur, who chair the formation talks, after consulting the leaders of all parties represented in parliament. When the formation talks have been concluded the Queen appoints the cabinet. Because this advice is a matter of public record, the Queen can not easily take a direction which is contrary to the advice of a majority in parliament. On the other hand, what is actually talked about behind the closed doors of the palace is not known. When a cabinet falls, the prime minister has to request the Queen to dismiss the cabinet.


The government of the Netherlands constitutionally consists of the Queen and the cabinet ministers. The Queen's role is limited to the formation of government and she does not actively interfere in daily decision-making. The ministers together form the Council of Ministers. This executive council initiates laws and policy. It meets every Friday in the Tręveszaal at the Binnenhof. While most of the ministers head government ministries, since 1939 it has been permissible to appoint ministers without portfolio.

The Cabinet is composed of all cabinet ministers and junior ministers, the staatssecretarissen. Junior ministers take over part of responsibilities of minister. They only attend the meetings of the Council of Ministers if the Council invites them regarding a specific subject.

The Council of Ministers makes decisions by means of collegiate governance. All ministers, including the Prime Minister, are (theoretically) equal. Behind the closed doors of the Tręveszaal, ministers can freely debate proposed decisions and express their opinion on any aspect of cabinet policy. Once a decision is made by the council, all individual members are bound by it and are obliged to support it publicly. If a member of the cabinet does not agree with a particular decision he will have to step down. Generally much effort is put into reaching relative consensus on any decision. A process of voting within the Council does exist, but is hardly ever used.

The cabinet is collectively responsible to Parliament, and must enjoy its confidence. It is not possible to for a minister to be a member of parliament, although many ministers are selected from parliament and have to give up their seat as a result. Ministers or junior ministers who are no longer supported by a parliamentary majority are expected by convention to step down.

As a result of the electoral system and the lack of dominating parties, coalition cabinets, composed out of two or three parties, are the norm.

Currently there are thirteen government ministries:

Ministry of General Affairs
Ministry of Home Affairs and Kingdom Relations
Ministry of Justice
Ministry of Foreign Affairs
Ministry of Defense
Ministry of Finance
Ministry of Economic Affairs
Ministry of Social Affairs and Employment
Ministry of Education, Science and Culture
Ministry of Public Health, Wellbeing and Sports
Ministry of Housing, Spatial Planning and the Environment
Ministry of Transport and Water Management
Ministry of Agriculture, Nature and Food Quality

Prime Minister

The Hague's Binnenhof. The ministry of General Affairs is in the centre with the Torentje, the office of the prime minister of the centre leftMain article: Prime Minister of the Netherlands

The official task of the Prime Minister is to coordinate government policy. He is chairman of the Council of Ministers and as such has the power to set the agenda of its meetings. In addition, the Prime minister is also Minister of General Affairs. The task of this small department is basically supporting the Prime Minister in his tasks as described above and organizing publicity around government proposals and decisions. The position of the Prime Minister has become more important since the Second World War.


The Dutch Parliament or States-General consists of a Lower House or Second Chamber and an Upper House or First Chamber, also referred to as the Senate. Both houses of Parliament discuss proposed legislation and review of the actions of the cabinet. The Second Chamber also has the right to propose or amend legislation.

The general entrance of the Tweede Kamer Members of the Second Chamber, generally considered the more important House, are elected directly every four years with a party-list proportional representation. Members are chosen on personal title, so in the relatively rare case that a member no longer agrees with his (or her) party, the member can decide to stay in the chamber, either as an independent representative, or connected to another parliamentary party. If a member decides to resign, the empty seat falls to the original party collecting the votes, and can be filled by a member of that party. Coalition governments may fall before their term ends, which usually results in early dissolution of the Second Chamber and new elections.

Members of the First Chamber are elected indirectly by provincial councillors, again every four years, just after the elections of the provincial councils, via a system of proportional representation. This election method reflects the historical roots of the First Chamber as a representative body of the different regional entities that formed the Netherlands. Nowadays, the Senate is mainly considered to be a body of elderly statesmen reconsidering legislation at ease, away from the pressure of daily political and media hypes.

Parties Political Leader Votes (2006) Tweede Kamer seats Eerste Kamer seats
Christian Democratic Appeal (CDA) Jan Peter Balkenende 2,608,573 41 23
Labour Party (PvdA) Wouter Bos 2,085,077 33 19
Socialist Party (SP) Jan Marijnissen 1,630,803 25 4
People's Party for Freedom and Democracy (VVD) Mark Rutte 1,443,312 22 15
Party for Freedom (PvdV) Geert Wilders 579,490 9 0
Green Left (GroenLinks) Femke Halsema 453,054 7 5
Democrats 66 (D66) Alexander Pechtold 193,232 3 3
Christian Union (CU) André Rouvoet 390,969 6 2
Political Reformed Party (SGP) Bas van der Vlies 153,266 2 1
Party for Animals (PvdD) Marianne Thieme 179,988 2 0
Lijst Pim Fortuyn (LPF)/Lijst Vijf Fortuyn (LVF) Rob Hessing* 20.956 0 1
Independent Senate Fraction (OSF) Hendrik ten Hoeven* did not compete 0 1
Total (turnout 80.0%) 9,654,475 150 75

*: These political leaders are not chair of Second Chamber parliamentary parties

Political Parties

The system of proportional representation, combined with the historical social division between Catholics, Protestants, Socialists and Liberals has resulted in a multiparty system. The major political parties are CDA, PvdA, SP and VVD. The parties currently represented in the Dutch Second Chamber are:

CDA is a centre-right Christian Democratic party. It holds to the principle that government activity should supplement but not supplant communal action by citizens. The CDA sees its philosophy as standing between the "individualism" of the VVD and the "statism" of the PvdA.
PvdA is a social democratic, centre-left Labour party. Its programme is based on greater social, political, and economic equality for all citizens.
SP is a far-left socialist party, which has evolved from a Maoist split from the Communist Party Netherlands into a much less radical socialist party. It remains far more left-wing than the Labour party, but at the same time is considered more conservative than the Labour party and the GroenLinks party.
VVD is a conservative-liberal party. It attaches great importance to private enterprise and the freedom of the individual in political, social, and economic affairs.
PVV is an anti-Islam nationalist-conservative party. It has a plaftorm based on free market economics and opposition to immigration and European integration.
GroenLinks combines, as it's name implies green, environmentalist, ideals with leftwing ideals.
ChristenUnie is an orthodox Protestant party, with conservative stances on abortion, euthanasia and gay marriage. In other areas the party is considered centre-left, for instance on immigration, welfare state and the environment.
D66 is a social-liberal radical party. The party supports liberal policies on abortion and euthanasia and reform of the welfare state. The party is left-wing on immigration, the environment and foreign policy.
The Party for the Animals is a single-issue animal rights party with natural affinity with environmental issues. For general purposes, the party is considered left of centre.
SGP is an orthodox Protestant party with conservative policies and it sees government as unconditional servant of God.

High Colleges of State
The Dutch political system has five so called the High Colleges of State, which are explicitly regarded as independent by the Constitution. Apart from the two Houses of Parliament, these are the Council of State, the Algemene Rekenkamer (Court of Audit) and the Nationale Ombudsman (National Ombudsman).

The Council of State is an advisory body of cabinet on constitutional and judicial aspects of legislature and policy. All laws proposed by the cabinet have to be sent to the Council of State for advice. Although the advice is not binding, the cabinet is required to react to the advice and it often plays a significant role in the ensuing debate in Parliament. In addition the Council is the highest administrative court.

The Algemene Rekenkamer investigates whether public funds are collected and spent legitimate and effectively. The Nationale Ombudsman investigates complaints about the practices of government. As with the advice of the Council of State, the reports from these organizations are not easily put aside and often play a role in public and political debate.

Judicial System
The judiciary comprises 19 district courts, five courts of appeal, two administrative courts (Centrale Raad van Beroep and the College van beroep voor het bedrijfsleven) and a Supreme Court (Hoge Raad) which has 24 justices. All judicial appointments are made by the Government. Judges nominally are appointed for life but actually retire at age 70. The Council of State functions as the highest court in most administrative cases.

Social Economic Council

Both trade unions and employers’ organisations are consulted beforehand in policymaking in the financial, economic and social area’s. They meet regularly with government the Social-economic council (Sociaal Economische Raad, SER). This body advises government and its advice, just like the advice of the High Colleges of State, cannot be put aside easily. The SER heads a system of PBO's, self-regulatory organizations that can make laws for specific economic sectors.

The following organizations are represented in the Social Economic Council: the leftwing trade union FNV, the Christian trade union CNV and the trade union for managerial staff MHP, the employers' organizations VNO-NCW, the employers' organization for smaller companies MKB, and the employers' organization for farmers LTO. One third of the members of the council is appointed by the government. These include both professors of economy and related fields and representatives of the economic planning institute CPB and De Nederlandsche Bank. In the working groups of the SER representatives of environmental and consumers' organizations are also represented.

Subnational Government

Regional government in the Netherlands is formed by twelve provinces. Provinces are responsible for spatial planning, health policy and recreation, within the bounds prescribed by the national government. Furthermore they oversee the policy and finances of municipalities and waterboards. The executive power is in hands of the Queen's Commissioner and the College of the Gedeputeerde Staten. The Queen’s Commissioner is appointed by the national Cabinet and responsible to the minister of Internal Affairs. Members of the Gedeputeerde Staten are appointed by, and responsible to the provincial legislature, the Provinciale Staten, which is elected by direct suffrage.

Local government in the Netherlands is formed by 458 municipalities. Municipalities are responsible for education, spatial planning and social security, within the bounds prescribed by the national and provincial government. They are governed by the College of Mayor and Aldermen. The Mayor is appointed by the national Cabinet and responsible to the minister of Internal Affairs. The Aldermen are appointed by, and responsible to the Municipal Council, which is elected by direct suffrage.

The major cities of Amsterdam and Rotterdam are subdivided into administrative area’s (stadsdelen), which have their own (limited) responsibilities.

Furthermore there are waterboards which are responsible for the country’s polders, dikes and other waterworks. These bodies are elected in non-partisan elections and have the power to tax their residents.

Foreign policy

The foreign policy of the Netherlands is based on four basic commitments: to the atlantic cooperation, to European integration, to international development and to international law. While historically the Netherlands was a neutral state, since the Second World War the Netherlands became a member of a large number of international organisations. Most prominently the UN, NATO and the EU. The Dutch economy is very open and relies on international trade. One of the more controversial international issues surrounding the Netherlands is its liberal policy towards soft drugs and the position of the Netherlands one of the major exporters of hard drugs. Since the golden age, the Dutch built up a colonial empire, which fell apart after the Second World War.