The general aim of the constitutional partners is to create a minimum overall tax burden of 8.3% for a structure consisting of a Netherlands holding company, owned by a Netherlands Antilles top holding company. This rate is applicable for qualifying corporate structures, i.e. the Netherlands Antilles company should have a participation in the Dutch company of at least 25%.
The dividend withholding tax of 8.3% is levied when dividends are distributed by the Dutch company to its Netherlands Antilles shareholder.

The following elements require your attention:

• No formal distinction between offshore and onshore companies will exist in the Netherlands Antilles.
• A flat profit tax rate of 34,5% is introduced.
• The provision of a transitional rule, by which the advantages of the former "offshore" regime are granted to existing offshore companies until 2019, under the condition that these companies have initiated substantial activities prior to December 31, 2001.
• The introduction of a 100% participation exemption for income resulting from Netherlands (and Netherlands Antilles) dividends. For income resulting from non Netherlands dividends a 95% participation exemption is introduced.
• The above scheme is also applicable when income is derived from capital gains realized on the alienation of shares in a foreign corporation.
• No dividend withholding tax is introduced. This means that the Netherlands Antilles will not have any withholding tax on dividends, royalties and interest.
• The total tax burden in case of the Netherlands Antilles company is holding a minimum of 25%of the shares in the Dutch company will be 8.3%.
• The introduction of a tax exempted Netherlands Antilles B.V.: easy incorporation, exempt form profit tax and dividend withholding tax, the management can only consist of residents of the Netherlands Antilles. The Netherlands Antilles B.V. is not subject to treaty protection.

Finally we take this opportunity to mention the "Private Foundation", an instrument of estate planning, which proofed to be a successful estate planning instrument over the past three years.

In case you need more information about the jurisdiction of the Netherlands Antilles you are kindly invited to contact the office of Dufisco N.V. in Amsterdam.

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