THE STANDARD PROFIT TAX REGIME OF THE NETHERLANDS ANTILLES
Interest income will trigger the 34.5% profit tax
If a Netherlands Antilles based company is subject to the standard profit tax regime of the Netherlands Antilles this means that the applicable profit tax rate is 34.5%.
Suppose this company acts as a holding company for a Dutch subsidiary. If that is the case the participation exemption provision that has been introduced in 2001 will be applicable. This means that both dividends and capital gains on an interest of at least 25% of the shares in a Dutch company are exempted for 100%.
The Netherlands Antilles do not levy a dividend withholding tax; so any dividend distributed by the Netherlands Antilles company will not be hit with a withholding tax. Also, a foreign shareholder, whether a company or other legal entity or a natural person, will not be subject to Netherlands Antilles profit or income tax as long as they have not been a resident of the Netherlands Antilles.
Interest income from loans will trigger the 34.5% profit tax unless such loans have been financed through a loan itself. In that case the interest burden will be allowed against the interest income. Depending on the facts it is also possible to agree with the tax inspector the tax consequences of such financing.
Karel Frielink
Attorney (Lawyer) / Partner
