C.I.F.A.: Agreement between the Netherlands and the Netherlands Antilles of 27 August 2004

Agreement between the Netherlands and the Netherlands Antilles of 27 August 2004 by C.I.F.A.
As announced in a number of official governmental publications, the governments of the Netherlands and of the Netherlands Antilles entered into an agreement about taxation on 27 August of this year.
The agreement was signed with the intention of re-introducing a 0% dividend withholding tax on participation distributions from the Netherlands to the Netherlands Antilles. To bring this about, the Netherlands Antilles has agreed to amend some sections of the Netherlands Antilles profit tax regulations.

Please find below a memorandum from the Director of Fiscal Affairs presenting a summary of these amendments and their effects. These amendments have already been discussed with the EU and the Netherlands and agreement has already been reached on them. They mainly relate to clarifications and to ridding the regime of certain aspects that might qualify as harmful tax competition. These amendments will be implemented in Netherlands Antilles legislation.

The introduction of 0% tax on dividends between the Netherlands and the Netherlands Antilles, intended to become effective on 1 January 2006, is an important step towards removing the disadvantage that the Netherlands Antilles has incurred in comparison with other European jurisdictions. The end result will be the creation of a sound basis for the further positive development of the Netherlands Antilles as a centre of international financial services.