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 on the 28th December 2018.
The list comprises 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.
The list will be used in relation to three measures to combat tax avoidance namely:
- The additional measure on controlled foreign companies (CFCs) 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 channeled to tax havens through the Netherlands.
- The Tax and Customs Administration will no longer issue rulings on transactions with companies headquartered in jurisdictions on the list.
The fact that Mauritius is not on the blacklist of the Netherlands and European Union is yet another accolade for the jurisdiction in addition to its rating as a Compliant jurisdiction by the OECD following the reforms.