Low tax gateway refurbished - A Blog from Freemont Group

Back in February we reported that the newly found independence of the Netherland’s last remaining colonies, the Dutch Antilles, offers interesting tax planning possibilities. Now our expectation is materializing in a new tax treaty between the Netherlands and Curaçao, Aruba and the BES islands. Although the treaty has not been made public, most important details have been released. So let´s cut right to the chase.
 
The absence of dividend tax is what draws most businesses to Curaçao. Also in 2012, there won’t be any changes in this respect: Curaçao continues to levy 0% and the Netherlands will not tax outgoing dividends of Dutch subsidiaries of Curaçao holding companies. In order for ‘active companies’ to qualify for this exemption, the holding must exceed 25% of shares of a subsidiary. The word ‘active’ does need further specification and we will keep our readers up to date on pending developments.
 
The smaller BES-islands that are now special municipalities of the Netherlands, will have a lowered dividend tax rate of 5%. Aruba, on the other hand, levies 10% on dividends. Aruba’s so called ‘transparent company’ (VBA) which is basically an (untaxed) offshore company, does not qualify under the treaty, neither does its soon to-be introduced equivalent on Curaçao.
 
The continuation of the tax arrangements between Curaçao and the Netherlands should boost confidence in the island’s reputation as a financial center and a gateway from high tax EU to low tax jurisdictions.