The Dutch Ministry of Finance has started an internet consultation on the designation of low-tax states for 2021 (so-called Dutch black list). Low-tax states are states with no income tax or with a statutory rate of less than 9%. Non-cooperative states are states that are included on the EU list of non-cooperative jurisdictions for tax purposes. For non-cooperative states, the Netherlands follows the list established by the EU. This EU list is not part of the consultation.
In order to implement measures against tax avoidance, the Dutch State Secretary of Finance determines annually by ministerial regulation which states are designated as low-tax and / or non-cooperative (hereinafter: the Regulation). 1 Low-tax states are states without a profit tax or with a statutory rate of less than 9%. Non-cooperative states are states included on the EU list of non-cooperative jurisdictions for tax purposes.
The changes to the Regulation that will apply as of the 2021 calendar year will be adopted and published In December 2020. By means of this consultation, interested parties are given the opportunity to respond to the designation of low-tax states as proposed by the State Secretary for Finance.
The Netherlands does not designate the non-cooperative states itself, but follows the list of non-cooperative jurisdictions for tax purposes drawn up by the EU. When the Regulation is amended in December, a link will be made with the EU list that applies at that time. Currently, the EU list adopted by the European Council (EcoFin) on 6 October is the most recent EU list. More information about the EU list of 6 October can be found here EU list of non-cooperative jurisdictions UpdateThis EU list is not part of this consultation..
As of January 1, 2019, an additional measure with regard to Controlled Foreign Companies (hereinafter: CFC- measure) has been included in the 1969 Corporate Income Tax Act. The CFC measure, arising from the first EU anti-tax avoidance directive, relates to a controlled body or a permanent establishment in a low-tax or non-cooperative state designated by ministerial regulation. In addition, since 1 July 2019, the Tax Authorities no longer provide certainty in advance about the tax consequences of transactions with entities established in these designated states (so-called ‘rulings’). Furthermore, a conditional withholding tax on interest and royalty payments to entities established in these designated states will come into effect on January 1, 2021. Finally, a withholding tax on dividend payments to entities located in a designated state has been announced as of January 1, 2024.
With a view to implementation practice and legal certainty, the Regulation establishes an exhaustive list of designated low-tax states and non-cooperative states each year. For the designation of low-tax states, it is annually reassessed which states have no profit tax or a profit tax with a statutory rate lower than 9%. This will be assessed on the basis of the regulations on 1 October of the calendar year preceding the calendar year in which the amended Regulations become applicable. Non-cooperative states are designated on the basis of the EU list of non-cooperative states jurisdictions for tax purposes. To this end, reference is made to the EU list that applies at the time of adoption of the Regulation.
Proposed designation of low-tax states
Compared to the low-tax states designated for the 2020 calendar year, no new states will be designated and no states will be removed from the list.1 The list for 2020 can be found here https://wetten.overheid.nl/BWBR0041785/2020-01-01
The Ministry of Finance would like to receive responses from interested parties who believe that a state is wrongly designated as a low-tax state or not. We ask you to substantiate your position with references to the laws and regulations applicable in the relevant state on October 1, 2020.
The designation of non-cooperative states is based on the list of non-cooperative jurisdictions for tax purposes to be established within the EU and is not part of this consultation.
This is the latest consultation of the designation of low-tax states in this form. In future, no more consultation will be started if the list of low-tax states remains unchanged. A consultation will only be started if proposed changes in the designation of low-tax states give cause to do so.
1 The list for the calendar year 2020 has been established in the Regulation on low-tax states and non-cooperative jurisdictions for tax purposes (Government Gazette 2018, 72064), as amended by the Regulation of the State Secretary of Finance of 18 December 2019 amending, among others, some implementing regulations in the field of taxes and surcharges (Government Gazette 2019, 69810).
2 For 2020, the following low-tax states have been designated: Anguila, Bahamas, Bahrain, Barbados, Bermuda, British Virgin Islands, Guernsey, Isle of Man, Jersey, Cayman Islands, Turkmenistan, Turks and Caicos Islands, Vanuatu, United Arab Emirates.