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Netherlands, Curaçao Seal Double Tax Deal

by Ulrika Lomas, Lowtax.net, Brussels
17 December, 2013

Dutch State Secretary for Finance Frans Weekers and Curaçao's Finance Minister José Jardim have reached an agreement on new bilateral arrangements, aimed at preventing double taxation between the Netherlands and Curaçao.

Both Ministers aim to submit a law to the Dutch Council of Ministers at the beginning of next year, and have therefore signed a letter of intent to this effect. Furthermore, Ministers Weekers and Jardim agreed that the Netherlands will support Curaçao in exchanging information, in accordance with the international standard developed by the OECD and the European Union.

According to the Dutch Finance Ministry, the arrangements provide for a new distribution of taxing rights in respect of pension income. On the basis of the new provisions, the Netherlands will be able to impose withholding tax on payments of pensions built up in the Netherlands, although received in Curaçao, upon emigration. Moreover, the Netherlands will be able to levy inheritance and gift tax for a period of up to five years, following emigration from the Netherlands to Curaçao.

In return, and of significant benefit for Curaçao, withholding tax will be waived for participation dividends. However, to prevent abuse of the regulation, additional requirements will be placed on shareholders in receipt of dividends.

Commenting, Curaçao's Finance Minister Jardim made clear that the deal offers stability and future prospects for Curaçao's financial sector. Further, it is important for the International Financial Sector in Curaçao that the new provisions maintain the link with the international market, Jardim emphasized.

Weekers welcomed in particular the fact that Curaçao has agreed to participate in automatic information exchange.

The new accord, which replaces the existing agreement between the two countries dating from 1964, is expected to enter into force on January 1, 2015. The Netherlands now aims to prepare new fiscal arrangements with Aruba and St Maarten.

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