In early June, the Netherlands and Cyprus signed an agreement on the avoidance of double taxation. The Netherlands now has tax treaties with all countries in the European Economic Area (EEA).
The tax agreement is reportedly intended to remove potential barriers (double taxation) that could hinder the economic activity of Dutch businesses in Cyprus and Cypriot businesses in the Netherlands. The treaty provides legal certainty for taxpayers in both treaty countries.
It is widely announced that the purpose of the treaty was also to prevent total tax evasion. In particular, the contract includes an anti-abuse clause that prohibits the use of the contract solely for tax avoidance. The tax agreement meets the minimum standards of the Organization for Economic Cooperation and Development (OECD) and the G-20 BEPS (project to combat tax base erosion, underreporting and tax evasion). Now the agreement requires ratification by the representative bodies of both countries.
– Cyprus is a traditional jurisdiction for international corporate structuring through the placement of both holding and operating companies. The Cyprus-Netherlands link has been a classic one until now due to the loyal international tax legislation at the EU level and the possibilities of domestic Dutch legislation. The conclusion of the agreement will give this tandem the necessary transparency. The movement of assets between structures in the Netherlands and Cyprus will now be subject to regulation adopted in accordance with OECD standards.
At the same time, it is important not to forget that any corporate structures and capital flow schemes must be natural and economically justified. The strongest logic of owning a business in a foreign (in relation to the place of business) country is the residence of the beneficiary (s). In this context, we offer not only the launch and maintenance of businesses and holdings in the Netherlands, but also solutions for relocation here for the residence of owners and managers (Sergey Graf, head of the B2B direction).
