International Tax Policy and Legislation. Institutional support and legislation for bilateral trade in the area of taxation. Arno Oudijn. May. Content. DTC’s Role and purpose of DTC’s Objectives of Netherlands and Colombian Governments Prospects Customs Agreement.
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Institutional support and legislation for bilateral trade in the area of taxation
Elimination of double taxation
Attribution of taxation rights
Mitigation of taxation at source
Obligation to eliminate double taxation
Prevention of fiscal evasion
Exchange of information
Specific rules to counter abuse
Encouraging cross-border trade and investment
Tresholds for taxation on activities in the host State (P.E.’s, services and wages) =>reduction of administrative burden
Mitigation of taxation at source on investment income and capital gains
Taxation of wages
Mutual Agreement Procedures
Small domestic market =>international orientation
Creating level playing field abroad
Encouraging investment in the Netherlands
Legal certainty for investors
Economy in transition
Encouraging investments in Colombia
Transition to regional hub
Company A is interested in a bid on a short term dredging contract in Colombia. If conditions are met, no obligation to pay income tax in Colombia;
Company B establishes subsidiary C in Colombia for agricultural production. C pays royalty’s to Company B. COL withholding tax is 33%. NL Corporate Income tax is 25%. Patent Box may be applicable.
Company D has a branch in COL. It seeks certainty that the profits attributed to the branch in COL are calculated according to international standards.
Company E is interested in establishing a subsidiary in the Netherlands. Under a DTC it can repatriate it’s profits at a reduced rate of dividend withholding tax.
Results expected in 2012
Ratification process in both countries
Positive effect on cross border trade and investment to be expected.
Mutual political interest recently reconfirmed
Negotiations planned 2012
Scope of the Agreement exceeds Free Trade agreement EU-COL
Enhanced facilitation of growing trade flows
Enhanced co-operation in enforcement in respect of IPR & drugs offences
Agreement to also cover Caribbean parts of the Kingdom