Between the countries of the Kingdom of the Netherlands since 1965 the Belastingregeling voor het Koninkrijk (hereinafter: BRK) is applicable. The BRK is a multilateral instrument to avoid double taxation and to prevent fiscal evasion. The countries of the Kingdom of the Netherlands are negotiating bilateral instruments to replace the BRK. One of these bilateral instruments to replace the BRK is the Rijkswet van 30 september 2015, houdende regeling voor Nederland en Curaçao tot het vermijden van dubbele belasting en het voorkomen van het ontgaan van belasting met betrekking tot belastingen naar het inkomen en een woonplaatsfictie ter zake van erf- en schenkbelasting (Belastingregeling Nederland Curaçao), which was published on the website of the Staatsblad van het Koninkrijk der Nederlanden on October 9, 2015 (Hereafer: the Belastingregeling). Although the bilateral instrument is a law and not a DTA, it has a structure that is somewhat similar to that of a regular DTA.
Based on Article 37, Paragraph 1 of the Belastingregeling, the fact that the Belastingregeling was published in the Staatsblad of October 9, 2015 means that the Belastingregeling enters into force on December 1, 2015 and hat the provisions of the Belastingregeling have effect as per January 1, 2016.
Below we will discuss a selection of provisions included in the Belastingregeling of which we think they might interest our readers:
Taxes covered
According to Article 2, Paragraph 3 of the Belastingregeling (“TAXES COVERED”) the existing taxes to which the DTA shall apply are:
a) in the case of the European Part of the Netherlands:
(i) de inkomstenbelasting;
(ii) de loonbelasting;
(iii) de vennootschapsbelasting, daaronder begrepen het aandeel van de regering in de nettowinsten behaald met de exploitatie van natuurlijke rijkdommen geheven krachtens de Mijnbouwwet;
(iv) de dividendbelasting; and
in the case of the Caribbean Part of the Netherlands:
(i) de inkomstenbelasting;
(ii) de loonbelasting;
(iii) de vastgoedbelasting;
(iv) de opbrengstbelasting;
(v) het aandeel van de regering in de nettowinsten behaald met de exploitatie van natuurlijke rijkdommen geheven krachtens de Mijnwet BES, het Mijnbesluit BES of de Petroleumwet Saba Bank BES;
b) in the case of Curaçao:
(i) de inkomstenbelasting;
(ii) de loonbelasting;
(iii) de winstbelasting; en
(iv) de dividendbelasting;
Paragraph 4 of Article 2 of the Belastingregeling subsequently arranges that the DTA shall apply also to any identical or substantially similar taxes, which are imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes.
Permanent establishment
Paragraph 3 of Article 5 of the Belastingregeling (“PERMANENT ESTABLISHMENT”) arranges that a building site, a construction, assembly or installation project, constitutes a "permanent establishment", but only where such site, project or activities continue for a period of more than 183 days.
Paragraph 4 of Article 5 contains an anti-abuse clause that aims at combating the artificial avoidance of a permanent estalishment status by the fragmentation of activities.
Associated enterprises
Paragraph 2 of Article 9 of the Belastingrageling (“ASSOCIATED ENTERPRISES”) contains a so-called appropriate adjustment clause.
Dividends
Paragraph 2 of Article 10 of the Belastingregeling (“DIVIDENDS”) maximizes the dividend withholding tax that a Source State is allowed to withhold over dividend distributions to 15 per cent of the gross amount of the dividends if the beneficial owner is a resident of the other country.
Paragraph 3 of Article 10 subsequently arranges that in certain situations the Source State is not allowed to withhold dividend withholding taxes over a dividend distributions. One of the situations mentioned in Paragraph 3 is the situation in which a qualifying entity, which capital is fully or partially dived in shares, and which is a resident of the other country holds directly at least 10 per cent of the capital of the company paying the dividends. What is a qualifying entity is determined in Paragraph 4 of Article 10.
Another situation in which the source state is not allowed to withhold dividend withholding taxes is the situation in which the beneficial owner of the dividends is a pension fund.
Interest
Article 11 of the Belastingregeling (“INTEREST”) arranges that, subjected to Article 33 of the Belastingregeling (“SAVINGS DIRECTIVE”), the source state is not allowed to withhold withholding taxes over interest payments if the beneficial owner of the interest is a resident of the other country.
Royalties
Article 12 of the Belastingregeling (“ROYALTIES”) arranges that the source state is not allowed to withhold withholding taxes over royalties if the beneficial owner of the interest is a resident of the other country.
Other
The Belastingregeling furthermore includes an article arranging for a Mutual Agreement Procedure (Article 24 of the Belastingregeling), an article on the Exchange of Information (Article 25 of the Belastingregeling) and an article regarding the assistance with respect to the Assistance in the Collection of Taxes (Article 26 of the Belastingregeling).
Furthermore Article 28 of the Belastingregeling contains regulations regarding a residence fiction with respect to the Dutch inheritance and gift tax.
Furthermore the Belastingregeling contains several transitional arrangements.
Click here to be forwarded to the Rijkswet van 30 september 2015, houdende regeling voor Nederland en Curaçao tot het vermijden van dubbele belasting en het voorkomen van het ontgaan van belasting met betrekking tot belastingen naar het inkomen en een woonplaatsfictie ter zake van erf- en schenkbelasting (Belastingregeling Nederland Curaçao), as available on the website of Staatsblad van het Koninkrijk der Nederlanden (the Belastingregeling is only available in the Dutch language).
Are you looking for an other DTA? Then check our section DTAs & TIEAs, a very efficient way to locate numerous DTAs.
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