Bermuda On Dutch 'Low-Tax Jurisdictions' List - Bernews

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.

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