The government of Netherlands has started series of consultations, planning to review country’s tax treaty policy and make a list of low-tax jurisdictions to apply enforced incoming controlled foreign company (CFC) rules.
The CFC rule will be introduced by Netherlands from January 1, 2019. It will be in line with the requirements of the EU Anti-Tax Avoidance Directive, and will target low-taxed CFCs – that means the companies registered in the jurisdictions with statutory tax rate of less than 7 per cent. British Virgin Islands are among the countries which are to be placed on the list, and to which the new rules will apply. According to the press release of the Ministry of Finance, the list will be updated annually. Dividend, interest and royalty payments to BVI and other listed jurisdictions will be subject to the headline corporate tax rate in the Netherlands, which is currently 25 per cent.