As of 1 January 2019 , The Netherlands has a list of countries with a “too low tax rate” (“the blacklist”). Apart from this Dutch list there is the EU-blacklist. The Dutch and the EU blacklists are used with three anti-tax evasion measures.

The first measure is aimed at avoiding companies assign movable assets to a country on this blacklist. This is the so called CFC-measure which applies as of January 2019. Furthermore, the blacklist will be used for the source tax on interest and royalties, applicable as of 1 January 2021. Royalty and interest payments to countries on the blacklist will be subject to a withholding tax of 21,7%. This is to avoid that The Netherlands is being used for transfer activities to countries that levy little or no tax. The threshold is 9%. Moreover, the Dutch Tax Authorities will not enter into Tax rulings concerning transactions with companies that are established in the countries which are on the blacklist. The blacklist is updated annually.

This year Barbados and Turkmenistan were added to the blacklist. It concerns countries without a corporate tax or with a corporate tax rate of less than 9%. Belize, Kuwait, Qatar and Saudi-Arabia have been deleted from the blacklist which has just been published. The blacklisted countries on the list are now:

01. Anguilla,

02. Bahama’s,

03. Bahrein,

04. Barbados,

05. Bermuda,

06. British Virgin Islands,

07. Guernsey,

08. Isle of Man,

09. Jersey,

10. Cayman Islands,

11. Turkmenistan,

12. Turks- and Caicos Islands,

13. Vanuatu and

14. The United Arab Emirates.

Barbados is added to the list because the corporate (profit) tax rate has been lowered to under 9% as of January 1, 2019. Turkmenistan is added because further analysis shows that the generally applicable profit tax rate is not 20% but 8%. For Saudi Arabia, Kuwait, Qatar and Belize, on the other hand, further analysis shows that local taxes correspond to a profit tax with a rate of at least 9%.

The tax avoidance measures will also apply to countries that are on the EU list (see https://www.consilium.europa.eu/en/policies/eu-list-of-non-cooperative-jurisdictions/ ) and are not already on the Dutch blacklist.

The countries on the EU blacklist (as of 14 November 2019) are 

01. American Samoa,

02. Samoa,

03. US Virgin Islands,

04. Fiji,

05. Guam,

06. Oman,

07. Trinidad and Tobago,

08. Vanuatu.

The measures will therefore apply to 21 countries in total.

For more details about the Author – Our Netharlands Network office i.e. Arcanum Management & Company Services B.V. i.e. https://www.arcanum.amsterdam/management-and-company-services

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RiSiKo Consulting LLP