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Netherlands: Several Tax Information Accords Concluded

(Dec. 3, 2009) On September 10, 2009, the Netherlands (in respect of Netherlands Antilles) and Norway signed an amending protocol to their income and capital tax treaty of November 13, 1989. Information about the new provisions has just become available; it is not yet determined when these provisions will come into force. (René Offermanns, Protocol to Treaty Between Netherlands in Respect of Netherlands Antilles and Norway – Details, IBFD TAX NEWS SERVICE, Nov. 30, 2009, via email from [email protected].)

Under the protocol, information relevant to the administration or enforcement of the tax laws of the nations involved will be exchanged, with privacy protected by the restriction on the information that it will only cover information needed for such administration or enforcement and only be disclosed to courts and other bodies involved in “assessment, collection, or enforcement or prosecution” for cases and appeals involving the taxes covered by the treaty. (Id.)

The protocol does not require the countries to carry out administrative measures at odds with the laws and practices of the other state, supply information they could not obtain under the laws or practice of the other state, or supply information revealing trade secrets or intellectual property. However, the parties cannot refuse to turn over information just because the state party has domestic interest in the information or the information is held by a bank, financial institution, or fiduciary agent. (Id.)

The Netherlands signed a similar agreement with the Cayman Islands on July 8, 2009; details of that exchange of information (TIEA) have also recently become available and while the enforcement date for the TIEA is not yet known, criminal tax provisions are retroactively applicable from January 1, 2004. (René Offermanns, Exchange of Information Agreement Between Cayman Islands and Netherlands– Details, IBFD TAX NEWS SERVICE, Dec. 1, 2009, via email from [email protected].)

The agreement with the Caymans provides dispute resolution procedures and allows the parties to take prejudicial or restrictive measures, such as denial of a tax credit or deduction, if the other state “does not engage in effective exchange of information; …[or] lacks transparency in the operation of its laws, regulations or administrative practices, or [if] there are no or nominal taxes.” (Id.)

The Netherlands also signed a protocol for its 2006 income tax treaty with Barbados on November 27, 2009. (Sophia Akhtar, Protocol to Treaty Between Netherlands and Barbados Signed, IBFD TAX NEWS SERVICE, Dec. 1, 2009, via email from [email protected].)