Post by Sapphire Capital on Oct 10, 2008 21:29:14 GMT 4
Netherlands and UK sign new tax treaty
Source: Joanna Faith ITR
The Netherlands and the UK have signed a new tax treaty aimed at avoiding double taxation, preventing fiscal evasion, facilitating exchange of tax information and assisting in tax collection.
Highlights of the treaty include a withholding tax exemption for dividend distributions by a taxpayer to its ultimate beneficial owner residing in the other state, special rules for real estate investment vehicles and anti-abuse provisions.
Michael Molenaars, a tax partner at Stibbe in Amsterdam, said the treaty is an improvement on what was already in place but he is cautious of some provisions.
"I'm not happy with dual resident entities having to be referred to a mutual agreement procedure to decide where the company is resident," he said. "This creates more uncertainty for the taxpayer and the process will take longer."
If the mutual agreement procedure doesn't reach a solution, taxpayers can't rely on the treaty. "This leaves the taxpayer in limbo as tax authorities can't come up with a decision as to where a company is resident," Molenaars said.
He is also concerned about anti-abuse provisions regarding dividends and interest. "This is not standard in Dutch tax treaties and creates more uncertainties. Anti-abuse provisions are a bit of overkill and I'm not sure they're needed," he said.
The new treaty will enter into force if and when it has successfully followed the parliamentary approval procedures in both countries.
Source: Joanna Faith ITR
The Netherlands and the UK have signed a new tax treaty aimed at avoiding double taxation, preventing fiscal evasion, facilitating exchange of tax information and assisting in tax collection.
Highlights of the treaty include a withholding tax exemption for dividend distributions by a taxpayer to its ultimate beneficial owner residing in the other state, special rules for real estate investment vehicles and anti-abuse provisions.
Michael Molenaars, a tax partner at Stibbe in Amsterdam, said the treaty is an improvement on what was already in place but he is cautious of some provisions.
"I'm not happy with dual resident entities having to be referred to a mutual agreement procedure to decide where the company is resident," he said. "This creates more uncertainty for the taxpayer and the process will take longer."
If the mutual agreement procedure doesn't reach a solution, taxpayers can't rely on the treaty. "This leaves the taxpayer in limbo as tax authorities can't come up with a decision as to where a company is resident," Molenaars said.
He is also concerned about anti-abuse provisions regarding dividends and interest. "This is not standard in Dutch tax treaties and creates more uncertainties. Anti-abuse provisions are a bit of overkill and I'm not sure they're needed," he said.
The new treaty will enter into force if and when it has successfully followed the parliamentary approval procedures in both countries.