A request for information needs to contain specific information

The former Netherlands Antilles concluded several tax information exchange agreements (‘TIEA’) during recent years. These TIEAs also apply to the newly formed country Curacao. The Tax Arrangement for the Kingdom (‘TAK‘) is applicable within the Kingdom of the Netherlands, which includes Curacao. Article 37 of the TAK also contains the facilities for the exchange of information within the Kingdom.

Without a TIEA in place or a specific article in a double tax treaty facilitating the exchange of information between the treaty parties, the Curacao tax authorities would be prohibited from effectively exchanging tax information based on the General Tax Ordinance of Curacao (‘GTO’). The GTO contains a secrecy obligation for all persons involved in tax matters. For instance, the obligation not only applies to the Curacao tax inspector, but also to the Curacao Tourist Foundation. As of 1 January 2010, the Curacao Tourist Board is charged with all matters relating to the room tax which is applicable in Curacao.

If a foreign jurisdiction, for instance the Netherlands, files a request with the Ministry of Finance in Curacao, then under the TAK all rights and obligations as stipulated in Dutch tax law, Curacao tax law and the TAK need to be analyzed carefully and complied with. For instance, a request for information needs to contain specific information with respect to the identity of the person involved, i.e. the purpose of the request, a declaration that the Netherlands has used all Dutch sources available based on Dutch law to obtain the requested information and an explanation why the requested information is relevant for Dutch tax purposes. If part of this information is missing then a request to exchange information may not be granted. These formal obligations should prevent countries from undertaking prohibited fishing expeditions or from requesting information that is unlikely to be relevant.

If all formalities are complied with (by the foreign tax authorities) does this automatically mean that the requested information must be provided? Not necessarily, the GTO also contains certain limitations. For instance, information that cannot be obtained by the Curacao tax authorities based on local administrative practice does not have to be provided. As a result, there would be no obligation to provide the annual report of a private foundation, if the private foundation does not run a business. 

Are alternative routes available for foreign tax authorities to request for information from residents of Curacao? Of course, they may always request the provision of certain information. For instance, it came to our notice that the Dutch tax authorities are sending requests for information directly to directors of private foundations on Curacao relating to potential tax obligations in the Netherlands of individual Dutch residents. It is important to note that the directors in Curacao do not have any obligation whatsoever to provide information in response to a direct request from the Dutch tax authorities. If the Dutch tax authorities would like to receive information from these directors they should follow the formal route as provided for by the TAK. Needless to say that the Dutch tax authorities are fully aware of this (time consuming) obligation!

Jeroen Starreveld
Partner / Tax Adviser

(21 December 2010)


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