There are two thing which are certain in life: you are going to die and in the meanwhile you will need to pay taxes. This old adage rings true for every person and company on earth yet it is true to varying degrees.

The Panama Papers shook the entire world to its foundation. How is it possible that people and companies could pay a small amount to taxes by just setting up phone companies and structures aided by companies such Mossack Fonseca? The data provided rare insights into how a global industry led by major banks, legal firms and asset management companies operated in the shadows to manage the money of the rich and famous. You might be wondering as a reader how this is important for information strategies in general and started yawning since taxes can be perceived as quite boring. An invitation is extended to you to hold on.

The above mentioned further awakened the politicians and the general public about the practice of big multinational companies not paying their fair share of taxes. The OECD for example started with the projects BEPS, base erosion profit shifting, which aimed at targeting these shady companies and structures. Despite all this efforts internet companies have an effective tax rate of 9.5% in Europe whereas for the other companies this numbers rises to 22%.

The discrepancy in tax rates is due to the fact that the system is adept at taxing companies with a physical location and companies such as Facebook and Google do not have this all the European countries. Yet, they do have a large user base in all the countries. This is why a proposal, by the European Committee, of taxing 3% of these companies’ revenue is on the table at the moment. Another proposal is taxing the user value creation. Users on Facebook for example create value when they like something because that generated data for this company. The challenge with this latter proposal is that companies such as Netflix and Amazon would no be hit by these taxes.

In my opinion it is in our nature to avoid paying taxes or at least more than our fair share. Taxes are partly used as an instrument to create equality. The peculiar thing is that everyone want more equality but at the same time wants to generate more wealth for themselves. From that point of view you will always have the cat and mouse game where the legislator is trying to tax these companies and conversely these companies are trying to come up with ways to avoid these legislation. Consequently, it is imperative that these companies have a clear understanding of their information strategy and digital business models in order to explain it clearly to legislators. Otherwise they may end up in a situation that they are unfairly taxed because the European countries do not understand exactly what it is that these internet companies do. Considering the turmoil in Italy you may get a situation where the Italy might proclaimed that they are going to overspend and get Facebook, Google etc to pay for it!

https://panamapapers.sueddeutsche.de/articles/56febff0a1bb8d3c3495adf4/

http://www.oecd.org/tax/beps/

https://fd.nl/economie-politiek/1273312/tang-verdubbel-de-ambities-voor-de-europese-digitale-taks-voor-facebook-en-google

https://fd.nl/economie-politiek/1275003/moody-s-verlaagt-italiaanse-rating-tot-net-boven-rommelstatus

When Groningen is mentioned in the news it is because the protests about extracting gas and where there are earthquakes. In general it is also known as a student city where there are more than 60.000 students. So how can this place be possibly denominated as the new Dutch Silicon Valley?

There is a rising number of tech companies establishing themselves in this city. It’s becoming more common to hear English around you. For example, the Client Innovation Center of IBM has an office there with more than 300 employees. When the company wanted to move to Groningen the municipality proposed to base outside the city next to the highway A7. IBM refused this since the idea was to be in the middle of city to allow their young people to be able to bike to work. The fact that IBM is here also is evidence of the fact that the city is not only a student city but also a city where there a lot a jobs to be filled. The city is transforming itself in a tech city of the North.

A proof of the above mentioned is the report of Deloitte Technology Fast50. This a yearly election where the 50 fastest growing tech companies are selected. In this year’s edition a total of 8 companies resided in Groningen. Taken more broadly in the province of Groningen there are on average more companies active in the internet-economy than in the rest of the Netherlands. Yet, events such as the biggest Blockchain Hacakaton in the SugarUnion factory went by unnoticed. Only local new and international news was on site.

Entrepreneurs such as Mark Vletter or Marro Mijnans try to put the city in the spotlight to make students and the population in general aware of the possibilities in Groningen. Succes stories such as the one from Rory Ou. She emigrated to Groningen from  San Fransico. Benefits she encountered where less commute time and the social welfare in general. Less people living on the streets and municipalities who are open and friendly.

In conclusion: is Groningen becoming the new Dutch Silicon Valley? Eindhoven is known a the high-end technology city, Leiden is known for it biotechnology and Delft for its automotive technology. Enough cities with enough tech so what makes Groningen unique? Is is the fact that it has the most tech companies and is not known for a particular type of technology? Maybe the fact that business here do something with technology? Obviously, this city is nowhere near the being a resemblance of the original Silicon Valley but can it become the Dutch version? The basic question is: what makes Groningen stand out in terms of tech?

https://fd.nl/futures/1274016/zelfs-uit-silicon-valley-komen-ze-naar-groningen