Open consultation on tax treaty policy and list of low-taxed jurisdictions | Deloitte Nederland

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Open consultation on tax treaty policy and list of low-taxed jurisdictions

On 25 September 2018, the Netherlands published an open internetconsultation on suggested amendments of its tax treaty policy and the list of low-taxed jurisdictions. Stakeholders are requested to respond before 22 October 2018.

4 October 2018

On 25 September 2018, the Netherlands published an open internetconsultation on suggested amendments of its tax treaty policy and the list of low-taxed jurisdictions. Stakeholders are requested to respond before 22 October 2018.

Tax treaty policy

The suggested amendments to the Netherlands’ tax treaty policy are twofold. In the first place, some amendments to the current tax treaty policy, that dates back to 2011, were already made at several moments during the last few years. To avoid fragmentation, the current amendments partially just update current policy. Besides that, the new policy should mirror new tax treaty policy for the period after the replacement of the dividend withholding tax act by the new withholding tax in abusive situations. In that respect, stakeholders are requested how the provisions on dividends, interest and royalties should be worded after the introduction of the new domestic withholding tax. Furthermore, stakeholders can respond to questions on how to deal with tax treaty negotiations with developing countries, mainly in relation to shipping and air transport, capital gains and fees for technical services.

List of low-taxed jurisdictions

The second part of the consultation relates to the list of low-taxed jurisdictions. As part of the legislative proposals on (i) the implementation of ATAD1 and (ii) the introduction of the withholding tax in abusive situations, reference was made to a list of low-taxed jurisdictions, i.e. countries that apply a statutory tax rate of less than 7% with 1 October as a reference date. That list is relevant for the new withholding tax as well as for the qualification of CFCs. The State Secretary now published the list with the proposed low taxing jurisdictions for the year 2019. The list consists of Anguilla, Bahamas, Bahrein, Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Isle of Man, Jersey, Kuwait, Palau, Qatar, Saudi-Arabia, Turkish and Caicos islands, the United Arab Emirates and Vanuatu. Stakeholders are requested to substantiate whether a country should be added or removed from the list.

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