The Netherlands Publishes Own List Of Low-Tax Jurisdictions In Fight Against Tax Avoidance

; posted on
January 3rd, 2019

The Dutch Ministry of Finance has announced the publication of the list of Low-Tax jurisdictions. Transactions or structures involving the countries on the blacklist will be subject to new anti-tax-avoidance measures that take effect in 2019 and 2021.

Listed Jurisdictions

The Netherlands' decision to release its own list comes despite the EU's release of its own list of non-cooperative tax jurisdictions in December 2017. The government decided to include jurisdictions to the list if such jurisdictions have no corporation tax or have a corporation tax rate that is lower than 9%.

Particularly, the list contains five jurisdictions that are currently blacklisted by the European Union as released December 5: American Samoa, Guam, Samoa, Trinidad and Tobago, and the U.S. Virgin Islands. In addition, the Dutch list includes another 16 low-tax jurisdictions that were not included on the EU’s: Anguilla, the Bahamas, Bahrain, Belize, Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, the Isle of Man, Jersey, Kuwait, Qatar, Saudi Arabia, the Turks and Caicos Islands, Vanuatu, and the United Arab Emirates.

The Dutch list will be updated annually, and the EU’s list is expected to be updated in the first quarter of 2019.

The Lists Subject to Anti-Avoidance Measure

According to the government release, the blacklist will be used in the application of several anti-avoidance measures. Beginning January 1, 2021, companies established in a country on the list will be subject to a 20.5 withholding tax on interest and royalties received from the Netherlands. This will prevent funds being channeled to tax havens through the Netherlands.

The Netherlands will also no longer issue advance tax rulings on transactions with companies headquartered in the blacklisted jurisdictions. Moreover, the MOF release also says that the new list will be used in the implementation of controlled foreign corporation rules that took effect January 1. With this measure, the government aims to prevent companies from avoiding tax by moving mobile assets to low-tax jurisdictions.

Source: Dutch Government

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