Netherlands publishes own list of low-tax jurisdictions in fight against tax avoidance

The Netherlands has drawn up new list of 21 low-tax jurisdictions to help implement new measures to combat tax avoidance. The list was published today in the Government Gazette.

The list contains five jurisdictions that are currently blacklisted by the European Union: American Samoa, the US Virgin Islands, Guam, Samoa, and Trinidad and Tobago.

In addition, the Dutch list includes another 16 low-tax jurisdictions: Anguilla, the Bahamas, Bahrain, Belize, Bermuda, the British Virgin Islands, Guernsey, the Isle of Man, Jersey, the Cayman Islands, Kuwait, Qatar, Saudi Arabia, the Turks and Caicos Islands, Vanuatu and the United Arab Emirates. These jurisdictions either have no corporation tax or have a corporation tax rate that is lower than 9%.

The Dutch list therefore contains more jurisdictions than the EU list.

‘By drawing up its own stringent blacklist, the Netherlands is once again showing that it is serious in its fight against tax avoidance,’ said State Secretary for Finance Menno Snel. ‘And that’s just one of the steps we’re taking.’

The list will be used in relation to three measures to combat tax avoidance. The first is the additional measure on controlled foreign companies (CFCs) announced on Budget Day, which will come into effect on 1 January 2019. With this measure the government aims to prevent companies avoiding tax by moving mobile assets to low-tax jurisdictions.

The list will also be used to implement a conditional withholding tax on interest and royalties from 1 January 2021. This means that companies registered in the jurisdictions on the Dutch list will pay 20.5% tax from 2021 on interest and royalties received from the Netherlands. This will prevent funds being channelled to tax havens through the Netherlands.

Thirdly, the Tax and Customs Administration will no longer issue rulings on transactions with companies headquartered in jurisdictions on the list.

You can read more about the measures in this factsheet.

The Dutch list will be updated each year, while the EU list will be updated in the first quarter of 2019. If, in the future, jurisdictions are added to the EU list that are not on the Dutch list, the measures will also apply to these jurisdictions.

The Dutch list was subject to a consultation from 25 September to 22 October 2018. The consultation resulted in 16 responses, none of which led to the list being amended.

Ministry responsible