Published On: Thu, Dec 12th, 2013

New tax treaty between Curacao and the Netherlands ready

Jose JardimTHE HAGUE, WILLEMSTAD – Junior Minister Frans Weekers from the Netherlands and the Curacao Minister of Finance Jose Jardim have reached an agreement on a new bilateral arrangements for the prevention of double taxation between the Netherlands and Curaçao. Both government officials will present the statute law early next year together in the Kingdom Council of Ministers. They signed today a letter of intent in Willemstad. Weekers and Jardim decided also that the Netherlands will support Curacao in information exchange in accordance with the international standards as developed by the OECD and the EU.

Both ministers are satisfied with the arrangement. Minister Jardim: "The agreement provides stability and future prospects for the financial sector in Curacao." Junior Minister Weekers also calls the agreement important for the international fight against tax evasion. "I think it's very good that Curacao is going be part of the automatic information exchange."

For the Netherlands, an important element in the system is the new distribution of taxing rights in respect of pension benefits. "Based on this new agreement, the Netherlands can withhold tax on incomes from accumulated pension received in the Netherlands, which are paid out in Curacao after emigration. Netherlands can levy taxes up to five years after emigration from the Netherlands to Curacao in gift and inheritance tax,” Weekers indicated. For Curacao the waiver of withholding taxes on participation dividends is an important provision. To prevent the unauthorized use of these taxes, additional requirements is set for the shareholder receiving the dividends.

"For the International Financial Sector in Curaçao it is also important that the link with the international market can still be found with this new arrangement," Jardim declared. "The new rules will ensure that these economic ties comply with the global requirements which are applicable in the present era."

The intended start date of the tax treaty between Curacao and the Netherlands is January 1, 2015. Provisions have been made for a retroactive effect for existing cases. The agreement will replace the existing treaty of 1964 between the two countries. The Netherlands is also preparing a new tax treaty with Aruba and St. Maarten.

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