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Netherlands Begins Consultation On Tax Blacklist

by Ulrika Lomas,, Brussels

11 October 2019

On October 7, 2019, the Dutch Government announced the launch of a consultation on the 2020 edition of the list of low-tax jurisdictions for the purposes of enforcing existing and forthcoming anti-avoidance legislation intended to tackle base erosion and profit shifting.

Jurisdictions named on the list, which have corporate tax rates of less than nine percent, fall within the scope of new Dutch controlled foreign companies (CFC) rules, which became effective from January 1, 2019, under the framework of the EU's Anti-Tax Avoidance Directive.

In addition, withholding tax equal to the Dutch headline corporate tax rate will be imposed on interest and royalty payments to these jurisdictions from 2021. Under recently proposed changes to Dutch corporate tax legislation, the rate of corporate tax in 2021 is expected to be 21.7 percent.

Furthermore, as from July 1, 2019, the Dutch tax authorities will no longer issue tax rulings to companies which are established in a listed jurisdiction.

The following sixteen countries are included on the Dutch list: Anguilla, Bahamas, Bahrain, Barbados, Bermuda, British Virgin Islands, Guernsey, Isle of Man, Jersey, Cayman Islands, Kuwait, Qatar, Turkmenistan, Turks and Caicos Islands, Vanuatu, and the United Arab Emirates.

Belize and Saudi Arabia, which appeared on the 2019 blacklist, have been removed from the proposed 2020 version, while Turkmenistan has been added to the updated list.

The tax avoidance measures will also apply to countries included on the European Union's tax blacklist. As of June 21, 2019, the EU list includes the following jurisdictions: American Samoa, Belize, Fiji, Guam, Marshall Islands, Oman, Samoa, Trinidad and Tobago, United Arab Emirates, US Virgin Islands, and Vanuatu.

The deadline for the submission of comments to the consultation is November 8, 2019.

TAGS: Isle of Man | Turkmenistan | United Arab Emirates | tax | Bahamas | Kuwait | Netherlands | Saudi Arabia | tax avoidance | interest | Bahrain | Belize | Bermuda | Cayman Islands | Fiji | Guernsey | Jersey | Marshall Islands | Qatar | Samoa | Trinidad and Tobago | Turks and Caicos Islands | Vanuatu | Virgin Islands | legislation | transfer pricing | tax rates | withholding tax | American Samoa | Anguilla | Barbados | British Virgin Islands | Guam | Oman | Europe | Tax | BEPS

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