New Tax system Curacao-Netherlands (BNR)
August 2015
Content new tax Netherlands Curacao (BNC)
Netherlands and Curaçao signed a new regime for the prevention of double taxation between the two countries: the Netherlands Tax Curacao (BNC). The new plan was submitted to the house of parlement on June 10, 2014. The BNC will replace – what Curaçao is concerned – the 1965 dating Tax Regulation for the Kingdom (BRK).
The intended date of introduction of the BNC is January 1, 2016
The BNC includes the following provisions.
- 5 years after emigration can raise their new country of residence inheritance and gift tax net of the levy in the original country of residence. There is a transitional measure for donations from former residents of the Netherlands who have done less than five years after emigration to Curacao donations. Netherlands can deduct only up to 12 months after emigration.
- Netherlands and Curaçao will automatically exchange information in accordance with the international standard.
- In addition to a withholding tax rate for dividends from investment 15 there will be a nulprocenttarief active companies on participation dividends. In connection therewith will be provided in a so-called ‘limitation on benefit provision (LOB). A LOB provision – in short – a provision which seeks access to a convention or only to grant to specific treaty benefits to certain qualifying persons ..
- Existing shareholdings of at least 25 percent of the nominal capital that do not qualify for the taref of 0%applies a withholding tax rate on dividends participation of five by the end of 2019.
- The BNC contains no provision regarding the evaluation criteria (the so-called corporate tie breaker), to determine which country has established the company for companies with a dual residence. If there is debate as to the residence, must consult each other about this place. For existing cases envisaged here no change.
- For non-public pensions are shared taxing rights to the source state tax of 15 percent. There is a retroactive effect (withholding tax) for pensions of Dutch already living on the island. When commutation of pension the source country is fully tax jurisdiction. Public pensions (except for local government pensions) the source country is fully tax jurisdiction.
- There is a source state taxation for the rewards of athletes and artists.
- There is a source state to tax rewards for providing services for more than 183 days (service PE).
- There is a withholding tax law for dividends and disposition gains on emigration accumulated substantial interest earnings. There is a transitional scheme for existing cases where the original residence called ‘substantial interest for Love “can only exercise within five years of emigration instead of ten years.
- There is a scheme aimed at so-called hybrid entities (legal entities which qualify for tax / legal differ between countries and therefore may have different tax consequences).
- There is a mutual agreement procedure with the possibility of (mandatory) arbitration.
- The BNC is the application of national law anti-abuse provisions not in the way.
The BNC is only applicable between the Netherlands and the Caribbean part of the Netherlands on the one hand and Curacao on the other. Aruba and Sint Maarten are fiscally autonomous and can act independently in negotiations with Curaçao to adopt similar arrangements. Netherlands also works with Aruba and St. Maarten on a bilateral arrangement to avoid double taxation.
