Bermuda On Dutch ‘Low-Tax Jurisdictions’ List

December 28, 2018 | 12 Comments

[Updated] Bermuda is one of 21 nations and territories included on a list of low-tax jurisdictions released today by the Netherlands Government in what they said was an aim to “implement new measures to combat tax avoidance,” with the European nation listing jurisdictions that “either have no corporation tax or have a corporation tax rate that is lower than 9%.”

In addition to Bermuda, four other British Overseas Territories and all three UK Crown Dependencies are listed, along with the five jurisdictions currently blacklisted by the EU, plus the Bahamas, Bahrain, Belize, Kuwait, Qatar, Saudi Arabia, Vanuatu and the United Arab Emirates.

The Netherlands’ Government website said, “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.

“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.”

This is the latest action from Europe in reference to financial centers, following after the legislation passed by the British Parliament seeking to order all British Overseas Territories to make their beneficial ownership registers public, and the European Union seeking ‘commitments’ from various jurisdictions in relation to their business practices, which in Bermuda’s case was passing the Economic Substance Act.

Update 7.19pm: A Ministry of Finance spokesperson stated, “The decision made by the Dutch Government to include Bermuda on their low-tax jurisdictions in unfortunate.

“The Government of Bermuda has had a Tax Information Exchange Agreement [TIEA] in place with the Netherlands since June 2009 and we are complaint in all areas of transparency and exchange of tax information. The Ministry of Finance will work to address the Dutch Government’s concerns.”

A ‘Factsheet’ released by the Netherlands follows below [PDF here]:

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Comments (12)

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  1. dondererd says:

    oh great …. now, where is Government’s plan?

  2. Who cares says:

    Really? Who cares what the Dutch think anyway? Let’s put our own black list out and put the Dutch and UK and US on it!

  3. Toodle-oo says:

    If the Dutch think we’re a low tax jurisdiction I suggest a few of them making those assumptions move over here to live and work for a few years. They’ll probably move back , paste haste , to their ‘high tax’ home base once they learn that low corporate tax rate accusations don’t mean an umbrella claim for low tax jurisdiction period.

  4. Darn it--there goes the.... says:

    Heineken and Amstel.

  5. TomBoy says:

    Curacao not on the list wonder why????

  6. JIGGSBDA says:

    Funny none of the Dutch Antilles are included on the lists Hmmm!?!

  7. legalgal says:

    Make mine a double Irish with a Dutch sandwich please. What not on the menu? And no Dutch tax havens?

  8. Come Correct says:

    “There’s only two things I can’t stand in this world. People who are intolerant of other cultures…and the Dutch.”

  9. Joe Bloggs says:

    Interesting. I wonder why Curaçao and other Dutch islands in the Caribbean are missing from that list?

    Should Bermuda now withhold 20.5% of all money remitted to the Netherlands by Bermuda companies?

    • legalgal says:

      And indeed the Netherlands/Ireland! (Although the EU was looking at some of the Irish arrangements.)

  10. David Osborn says:

    Thank you for the article! Bermuda has been a famous low-tax zone for a long time now. “Many large corporations utilise Bermuda’s attractive taxation regime, which offers 0% corporate tax. In 2014, over 25% of all Fortune 500 companies were operating subsidiaries in Bermuda. One of the best examples is Google, which transferred international profits to Bermuda via subsidiaries in Ireland and the Netherlands. Such a solution could potentially save Google approximately $2 billion in taxes annually, according to information provided by Bloomberg.” – http://confiduss.com/en/services/incorporation/criteria/low-tax/. What do you think about that?

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