In the beginning of October, the government of Netherlands announced the launch of consultation on next year’s list of low-tax jurisdictions to enforce existing and future anti-avoidance legislation. The British Virgin Islands is among sixteen countries included on the Dutch list, as one of jurisdictions with corporate tax rates of less than nine percent, and as such it will fall within the scope of new Dutch controlled foreign companies (CFC) rules, which became effective from January 2019 under the framework of the EU’s Anti-Tax Avoidance Directive.
Also, from 2021 withholding tax equal to the Dutch headline corporate tax rate will be imposed on interest and royalty payments to the jurisdictions named on the list. From July 2019, the Dutch tax authorities do not issue tax rulings to companies which are established in one of these jurisdictions.
Belize, which was present on the 2019 blacklist, has been removed from the proposed list for 2020, however, tax avoidance measures will apply to this jurisdiction as it remains included on the EU’s tax blacklist.