Business Operations in The Netherlands Antilles analyzes both the existing legal framework affecting foreign investment in The Netherlands Antilles and the system of taxation applying to business operations. Written by Geraldine C. Josephina, Esq., Loyens & Loeff, this Portfolio begins with an overview of the regulations and processes governing business operations in The Netherlands Antilles. It identifies the incentives for and restrictions on foreign investment and details the country’s foreign exchange policy, trade and commerce regulations, immigration regulations, and labor relations.

Business Operations in The Netherlands Antilles reviews the various forms of doing business in The Netherlands Antilles and summarizes the major taxes imposed, including personal income tax, wage tax, profit tax, gift and inheritance tax, tax on the transfer of property, the sales tax levied in the Leeward Islands and the turnover tax levied in the Windward Islands.

Worksheets include the texts of various ordinances, tax forms and the text of the Norway-Netherlands Antilles tax treaty.

Business Operations in The Netherlands Antilles allows you to benefit from:

• A perspective that addresses the concerns of foreign investors/enterprises and their advisors looking to invest/do business or already invested/doing business in the country
• Identification of those features of the country’s system that are likely to prove most problematic to outside investors
• Emphasis on those aspects of the tax system that impact transactions and structures with a cross-border dimension
• Information and insight to enable users to anticipate the pitfalls and opportunities likely to arise in making an initial investment, carrying on operations and devising potential exit strategies
• Invaluable practice documents including tables, charts and lists
• Time-saving citations to relevant sections of tax laws, regulations, court cases, and more.

This Portfolio is part of the Foreign Income Portfolios Library, a comprehensive series containing more than 100 Portfolios, which covers critical transactions and issues in international taxation. This highly-regarded resource library offers commentary on a wide range of foreign income topics including: Foreign Tax Credit, Business Operations in Italy, Business Operations in Puerto Rico, Branch Profits Tax, Source of Income Rules, Subpart F (Controlled Foreign Corporations), Foreign Partnerships and Partners, Transfer Pricing, and more.

Detailed Analysis

I. The Netherlands Antilles-The Country, Its People, and Economy

A. The Country

B. Language

C. Population

D. Political Organization

E. Legislative Power

F. Executive Power

G. Judicial Power

H. The Economy

II. Operating a Business in The Netherlands Antilles

A. Foreign Investment Regulation

1. General

2. Incentives

a. Industries, Real Estate Companies and Hotels

b. E-zone Companies

3. Restrictions

B. Currency Exchange Controls

C. Trade and Commerce Regulation

1. Imports and Exports

a. Licenses and Quotas

b. Customs Duties and Other Taxes

c. Documentation

2. General Regulation of Business

a. Monopolies

b. Mergers

c. Restrictive Trade Practices

d. Price Controls

e. Securities Regulation

f. Supervision of Investment Institutions and Trust Service Providers

3. Licensing and Franchising in The Netherlands Antilles

a. Patents

b. Trademarks and Trade Names

c. Industrial Knowâ€"how

d. Copyrights

D. Immigration Regulations

E. Labor Relations

F. Financing the Business

III. Forms of Doing Business in The Netherlands Antilles

A. Principal Business Entities

1. Sole Proprietorship

2. Joint Stock Corporation

3. Partnership

4. Branch of a Foreign Corporation

5. Other Entities

a. Joint Venture

b. Foundation

c. Cooperative

d. Mutual Guarantee Company

e. Association

B. Joint Stock Corporation

1. Formation

a. Purpose Clause

b. Corporate Name

c. Incorporators

d. Articles of Incorporation

e. Capital Stock

f. Incorporation Procedure

g. Costs of Incorporation

(1) General

(2) Tariffs

(a) Deed of Incorporation

(b) Amendment of the Articles of Incorporation

(c) Expansion of the Authorized Capital

2. Operation

a. License

b. Amendment of Articles of Association

c. Repurchase of Own Shares

d. Shareholders' Meetings

e. Directors' Meetings

f. Books and Records

g. Financial Statements

h. Dividends and Other Distributions of Profits

i. Reserves

3. Seat Transfer

4. Conversion

5. Merger

6. Division

7. Dissolution

8. Reorganization

C. Partnership

1. Formation

2. Administration

3. Dissolution

D. Branch of a Foreign Corporation

1. Registration

2. Liability

3. Books and Records

E. Other Business Entities

1. Foundation

2. Cooperative Society

IV. Principal Taxes

Introductory Material

A. Personal Income Tax

B. Gift and Inheritance Tax

C. Transfer Tax

D. Sales Tax or Value Added Tax, and Turnover Tax

1. Delivery of Goods

2. Services Rendered

3. Import of Goods

4. Exemptions

5. Saba, St. Eustatius and St. Maarten

6. Tax Rates

E. Payroll Tax

1. Definition of Employee

2. Definition of Wages

F. Other Taxes

1. Occupancy Tax

2. Land Tax

3. Stamp Tax

4. Hotel (Room) Tax

5. Gambling License Tax

6. Auction Tax

V. Taxation of Domestic Corporations

A. What Is a Domestic Corporation?

B. Corporate Income Tax

1. Taxation of Worldwide Income

2. Accounting

a. General

b. Accounting Periods

c. Accounting Methods

d. Inventories

e. Consolidation

f. Reserves

3. Calculation of Gross Income

a. General

b. Capital Gains

c. Dividend Income

d. Income from Foreign Sources

4. Business Expenses

a. General

b. Organizational Expenses

c. Travel and Entertainment Expenses

d. Interest and Royalties

e. Taxes

f. Depreciation and Amortization

g. Obsolete Equipment

h. Charitable Contributions

i. Losses

j. Reserve Accounts

k. Bad Debts

l. Rents

m. Salaries and Wages

5. Loss Carryovers

6. Foreign Tax Credit

7. Tax Rates and Calculation of Taxable Income

8. Assessment and Filing

a. General

(1) Onshore Companies

(2) Offshore Companies

b. Provisional Assessment

c. Final Assessment

d. Supplementary Assessment

e. Appeal

C. Tax Facilities

1. Shipping and Aircraft Companies

2. Netherlands Antilles Limited Liability Companies

3. Fiscal Unity

VI. Taxation of Foreign Corporations

A. What Is a Foreign Corporation

B. Determination of Taxable Income

C. Method of Taxation

VII. Taxation of a Branch of a Foreign Corporation

A. Determination of Taxable Income

B. Method of Taxation

C. Subsidiary v. Branch

VIII. Taxation of Partnerships

IX. Taxation of Other Business Entities

A. Netherlands Antilles Private Foundation

B. Netherlands Antilles Common Foundation

C. Cooperative Society

X. Taxation of Individuals - Residents

A. Scope of Taxation

B. Residence

C. Determination of Gross Income

1. Real Property

2. Movables

3. Enterprise and Labor

4. Rights to Periodic Payments

5. Nontaxable Income

6. Nontaxable Income by Virtue of a Tax Holiday

7. Tax Facilities for Pensioners and/or Rentiers

D. Allowable Deductions

1. Personal Allowance

2. Social Security Premiums

3. Expenses of a Business or Profession

4. Depreciation

5. Costs Related to Real Property

6. Costs Related to Dividend and Interest Income

7. Pension Premiums

8. Interest on Loans

9. Annuity Premiums

10. Charitable Contributions

11. Extraordinary Expenses

12. Miscellaneous

E. Tax Rates

F. Fiscal Year

G. Filing and Assessment

1. Tax Return

2. Assessments

XI. Taxation of Nonresident Aliens

XII. Gift and Inheritance Tax and Tax on Real Property

A. Gift and Inheritance Tax

1. Liable Persons

2. Territorial Scope of Taxes

3. Taxable Base

4. Tax Rates

B. Tax on Real Property

1. Liable Persons

2. Territorial Scope of Tax

3. Taxable Base

4. Tax Rates

XIII. Intercompany Pricing

XIV. Tax Treaties

A. General

B. EC Directive on the Taxation of Savings Income

C. Tax Treaty with Norway

1. Taxation of Business Income

a. Permanent Establishment

b. Planning to Minimize Taxation of Business In-come Under the Treaty Between The Netherlands Antilles and Norway

2. Taxation of Investment Income

a. Meaning of Investment Income

b. Withholding Rates

D. Avoidance of Double Taxation Within the Kingdom of The Netherlands

E. Summary of Tax Rates Applicable to Holding Companies Under Tax Treaties and the Antilles Profit Tax Ordinance of 1940

XV. Taxation in Aruba

A. Salient Features

1. General

2. Flat Tax Rate

3. Grandfathering Provisions

B. Main Features of the Profit Tax Ordinance

1. Participation Exemption

2. Restrictions with Respect to the Tax Deductibility of Certain Expenses

C. Dividend Tax and Imputation Payment System

1. Dividend Withholding Tax

a. General

b. Tax Rate

c. Withholding

d. Tax Credit

2. Imputation Payment System

a. General

b. Conditions for the Company

c. Conditions for the Shareholder

D. Income Tax Treatment of Individuals Resident Abroad

1. General

2. Substantial Interest

3. Shareholding in a Grandfathered Offshore Company

E. Example of Taxation - Income from Imputation Payment Company

F. New Tax Regime

Working Papers

Table of Worksheets

Worksheet 1 Trade Marks National Ordinance 1995

Worksheet 2 Copyright Ordinance 1913 (including amendments made by P.B. 1975

Worksheet 3 Guarantee Ordinance Profit Tax 1993

Worksheet 4 National Ordinance on Profit Tax 1940 (including amendments made by P.B. 2001, no. 145)

Worksheet 5 Return Form (BO) for Offshore Companies

Worksheet 6 Return Form (VAS) for Other Companies

Worksheet 7 Personal Income Tax Ordinance 1943 (including amendments made by P.B. 2001-94)

Worksheet 8 Return Form for Individuals

Worksheet 9 [Reserved]

Worksheet 10 [Reserved]

Worksheet 11 Norwayâ€"Netherlands Antilles (Income and Capital) Tax Treaty.

Bibliography

OFFICIAL

Laws & Ordinances: