On December 12, 2013, the Netherlands and Curaçao reached agreement on a new regulation for the avoidance of double taxation between the two countries (“BRNC”). This was announced by the Dutch Ministry of Finance. The intention is to have the BRNC – after ratification – replace the Tax Regulation for the Kingdom (“TRK”) in the relations between Curaçao and the Netherlands as of January 1, 2015. The text of the BRNC has not yet been made public. However, the main features have been published; we will discuss these in more detail below. We will also discuss an important undertaking given by the Ministry, also given in previous years, on the levying of Dutch corporate income tax on dividends received from and capital gains on a substantial interest shareholding under the general anti-abuse provision of the current TRK, which will also not be applied in 2014.

The current TRK will, in principle, still apply to the relationship between and with Aruba and Sint-Maarten. However, the Netherlands is also preparing a new system of taxation with these countries.

The main features

The most important amendments made in the BRNC in comparison to the TRK are:


The following maximum dividend withholding tax rates will apply:

  • 0% for dividends from participations held by active companies, whereby a limitation-on-benefits provision, which has yet to be formulated, will also play an important role. We expect that a participation will be present if 10% or more of the share capital is held. No further information has as yet been provided about how the term ‘active companies’ is defined. We will therefore have to wait and see what the specific requirements will be.
  • 5% for existing situations where a non-active holding company resident on Curaçao holds a Dutch participation of at least 25%. As a result of these transitional rules, the Netherlands cannot levy dividend withholding tax of more than 5% from 2015 through 2019. It is as yet unknown when the structure must be in place.
  • 15% in all other cases. The Dutch national tax rate is 15% and no dividend withholding tax is levied on Curaçao.

The 8.3% tax rate will therefore no longer apply as of 2015.

Profits on substantial interest

The BRNC gives the Source state the right to levy taxes on dividends and on capital gains realized on the substantial interest profits accrued in the Source state before the date of emigration to the other country.


It is still unclear to what extent the anti-abuse rules in the current TRK will be included in the BRNC.

However, the Netherlands has given an undertaking to Curaçao not to levy Dutch corporate income tax in 2014 on dividends from shares and on profits achieved by transferring shares involving a substantial interest package that does not form part of the business assets. Taxation on the basis of Dutch domestic law could apply if one of the main purposes of the structure is to avoid paying income tax or dividend withholding tax in the other State. This undertaking could be particularly relevant for Curaçaoan passive holding companies with an interest of 5% or more in a Dutch subsidiary.


The Source state may levy a tax of 15% on non-government pensions which is, in principle, available for set-off in the State of residence. This does not apply to Dutch nationals already receiving a pension and who are resident on Curaçao: they will only be subject to tax in the State of residence.

Hybrid entities

A rule will be introduced specifically for hybrid entities. The exact details have not yet been made available. Normally these types of rules are aimed at situations whereby income, profit or benefits are obtained by entities that are regarded as transparent by one of the States. This provision seems to be primarily intended for combating situations of hybrid entities being used to create ‘double dips’.

Permanent establishment – ‘services permanent establishment’

The Source state will be given the right to levy taxes on payments for the performance of services that take longer than 183 days. This will be realized by including the services permanent establishment in the definition of the term permanent establishment. A services permanent establishment can arise when a person/entity from one State (State of residence) provides services in the other State (Source state).

Gift and inheritance tax

The former State of residence of the testator or benefactor may levy taxes during the first five years after emigration, whereby the gift and inheritance tax of the new State of residence may be offset. The exact details have not yet been made available.


The possibility of obligatory or voluntary arbitrage will be included in the rules on mutual consultation. The Netherlands and Curaçao will also automatically exchange information pursuant to the international standard.

If you would like advice on the amendments discussed above or any actions or follow-up you may need to take, please contact one of our tax advisors at KPMG Meijburg & Co.

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