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Lowtax
Network Content Update | Issue XXVIII | 20 March 2008 |
ONLINE VERSION:
HTTP://WWW.LOWTAX.NET/NEWSLETTER/CONTENT_UPDATE_XXVIII.ASP
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Dear Colleague, This week:
I hope you find this update useful. Please remember that you can customise your mailing preferences by visiting your own profile page to choose from 29 offshore tax and law subjects in order to receive just the information you want. You can also unsubscribe completely by following the instructions at the bottom of this page. Kind regards, |
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Offshore
The Netherlands Antilles consist of five islands between Venezuela and Cuba; they form part of the Kingdom of the Netherlands. However, a constitutional crisis which erupted in 2004 owing to irreconcilable differences between the constituent islands, led to a joint Commission appointed by the Netherlands and the local government concluding that the jurisdiction should be broken up, with the islands of Curacao and St Maarten becoming autonomous countries alongside the Netherlands and the Caribbean island of Aruba, whilst the remaining three islands - Saba, Bonaire and St. Eustatius - should be brought under the direct control of the Dutch government in The Hague. This was approved by the Dutch cabinet in December 2004. The transition process towards the dismantling of the Netherlands Antilles was expected to begin in July 2007, and it is the aim of the agreement to dissolve the Netherlands Antilles by 15th December, 2008. The legal, political and administrative systems are largely modelled on Dutch originals, but there has been some common law influence on the offshore regime. Government, Judiciary and Central Bank are established on Curacao, the largest island. Dutch is the official language, but English is often spoken; the local language is Papamiento, a Creole dialect. The local currency is the Netherlands Antillean guilder (ANG). There is a well-connected airport on Curacao; flight time to Miami being about one hour. Curacao has a good port, and is part of the Dutch ship registry. The Antillean economy is very open and is highly dependent on tourism and offshore financial services. Most goods are imported since there are few natural resources. The important refinery in Curacao was shut for a while but is now partially open again, mostly for trans-shipment. GDP per head at USD16,000 (2004 est.) is reasonable for the Caribbean area as a whole, but unemployment is high. The Government runs a large deficit and has had talks with the IMF. Local taxes are quite high for residents, but there is a well-developed offshore sector which originated in World War Two as a haven for Dutch companies fleeing the German occupation of the Netherlands. Many financial links are to the Netherlands in one direction and to South America in the other. The financial and professional infrastructure is well-developed, with a Dutch (civil law) cast. Banking, mutual funds (for professional investors), shipping, licensing, insurance and holding comnanies are the main offshore sectors. The tax burden on most offshore activities is light but not minimal. The Netherlands Antilles has traditionally had tax treaties only with Norway and, of course, the Netherlands, which gives access to the many Dutch tax treaties and good withholding tax regime. However, it is now seeking to create a more extensive tax treaty network, and in addition to a Tax Information Exchange Agreement currently in the pipelines with the United States, has concluded an agreement on the taxation of savings with the United Kingdom, and is in discussions with several other countries, including Barbados and Trinidad and Tobago, Sweden, Iceland, Denmark, Greenland, Finland, the Faroe Islands, Spain, Canada and Mexico, among others. There is no banking secrecy legislation as such, but the jurisdiction does not normally respond to requests for help on tax matters from other than treaty partners. In fact, the Netherlands Antilles have faced pressure from international bodies to legislate more firmly against drug-related financial transactions: the Antilles' geographical position has led to a substantial illicit trade in drugs and drug money through the jurisdiction. The authorities are seen as being helpful to international investigators of drug crime, but the Parliament has in the past shown itself reluctant to put in place legislation improving disclosure. At the end of 1999, Netherlands Antilles passed new tax legislation known as The New Fiscal Framework intended to improve the jurisdiction's image as an Offshore Financial Centre and to revitalise its financial services industry. The legislation, which came into force from 1st January 2002 along with a revised 'BRK' (Tax Arrangements for the Dutch Kingdom), removed the distinction between 'onshore' and 'offshore' companies and simplified tax rates. However, existing offshore companies are grandfathered until 2019. Alongside the tax legislation, a new corporate form was introduced to allow offshore operations on a tax-exempt basis: this is the NABV (Netherlands Antilles Besloten Vennootschap) or AEC in English (Antilles Exempt Company), and it is has supplanted the offshore NV for many purposes. Learn more in our full Netherlands Antilles Knowledgebase. |
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Offshore
Vanuatu is a group of tropical islands on the eastern seaboard of Australia, off the coast of Queensland, with a mostly Melanesian population of 212,000 (July 2007 est.). The 80 islands are mountainous, and some are volcanic. There are international airports on the two main islands; most connections are to Australia. The islands had British/French governance until independence in 1980; languages are English, French and Bislama (pidgin). The time zone is GMT plus 11 hours. There is a uni-cameral Parliament with a Westminster-model Prime Ministerial government and an elected President. The legal system is based on English common law with some civil law influence. Vanuatu's economy, historically based on agriculture and fishing, is now dependent on tourism and financial services. Cruise liners call at the two deep-water ports. GDP of $2,900 per head is low and growing rather slowly, partly due to adverse climatic and geological conditions. There is a strong contrast between the relatively sophisticated capital Port Vila, with its expatriate workers, and the subsistence economy of most of the Ni-Vanuatu islanders. Most goods are imported, and import duties and value-added tax are the main sources of Government revenue. The currency is the Vatu (VT), fixed against a dollar-based currency basket. In recent years, US$1 has been worth approximately VT100. There is no direct taxation in Vanuatu. Import and export duties, registration fees, business license fees, stamp duty, VAT and a tourist turnover tax generate Government revenue. The offshore sector is well-developed, with the IBC-style International Company being the entity of choice. Banking, insurance, trust management and electronic gaming are the most important activities. Vanuatu has no tax treaties, and no international mutual assistance treaties. There is domestic legislation to counter money-laundering and which enables international co-operation with investigators. However, privacy is good with statutory protection, and there is no crime of tax evasion since there are no taxes. Learn more in our full Vanuatu Knowledgebase. |
