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Curacao Archieven — KC Accounting

New Tax Arrangement For The Netherlands And Curacao

By Tax

On 10 June 2014, the proposed new bilateral arrangement for the avoidance of double taxation for the Netherlands and Curacao (the “TNC”) was presented to Dutch Parliament. The TNC shall replace the current Tax Arrangement of the Kingdom and is expected to enter into force as per 1 January 2015.

Amongst other things, the TNC introduces a 0% dividend withholding tax rate, albeit under strict conditions. The TNC further includes a beneficial transitional rule under which shareholdings of at least 25% may apply a reduced 5% dividend withholding tax rate (currently 8.3%) until 31 December 2019.

Netherlands And Curaçao Reach Agreement On New Bilateral Tax Arrangement

By Tax

On December 12, the Dutch Ministry of Finance announced that Curaçao and The Netherlands have reached agreement on the text of a new bilateral arrangement for the avoidance of double taxation (the “Arrangement”). The Arrangement shall replace the current Tax Arrangement of the Kingdom (“TAK”) and, subject to parliamentary procedures in both countries, should become effective per 1 January 2015.

The announcement reconfirms the introduction of a zero percent (0%) dividend withholding tax rate on distributions of profits albeit under strict conditions (the current dividend withholding tax rate under the TAK is 8.3%). The zero percent rate will apply on dividends paid to certain active parent companies qualifying under a “limitation of benefits” provision, which will be introduced. This “limitation of benefits” provision has however not yet been clarified.