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May

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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May

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  1. International Tax Policy and Legislation Institutional support and legislation for bilateral trade in the area of taxation Arno Oudijn May

  2. Content • DTC’s • Role and purpose of DTC’s • Objectives of Netherlands and Colombian Governments • Prospects • Customs Agreement

  3. Role and purpose of DTC’s 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 Legal certainty Encouraging cross-border trade and investment

  4. Typical issues in DTC’s related to 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 Dividends Interest Royalty’s Capital Gains Taxation of wages Non-discrimination Mutual Agreement Procedures

  5. Objectives of the Netherlands and Colombian Governments Netherlands Small domestic market =>international orientation Creating level playing field abroad Encouraging investment in the Netherlands Legal certainty for investors Colombia Solid growth Economy in transition Encouraging investments in Colombia Transition to regional hub

  6. Examples 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.

  7. Work in progress Ongoing negotiations Results expected in 2012 Ratification process in both countries Positive effect on cross border trade and investment to be expected.

  8. Customs Agreement 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

  9. Thank you for your attention

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