KPMG Meijburg & Co, the Netherlands comments on the term permanent establishment in the Netherlands-Danish tax treaty of February 20, 1957.
This is contribution number 20 by KPMG Meijburg & Co regarding the term permanent establishment in the Netherlands-Danish tax treaty of February 20, 1957.
Resolution of September 6, 1995, no. IFZ95/1091M
On September 6, 1995, the Dutch Ministry of Finance issued the following statement.
Article 2, first paragraph, section f of the 1957 tax treaty between the Netherlands and Denmark provides only a brief description of the term 'permanent establishment'. The treaty does not contain the more or less standard rule for construction or installation activities. This deviation from the OECD Model Treaty and from the great majority of Dutch tax treaties caused some confusion. It has been agreed with the competent Danish authorities that the execution of a work or of construction or installation activities will qualify as a permanent establishment in the sense of the treaty if the performance of these activities exceeds a period of 12 months; such in conformity with the provision of article 5, paragraph 3 of the OECD Model Treaty. Thereby the part of the activities at the building site which is carried out by a subcontractor should also be taken into account for the determination as to whether or not a permanent establishment exists, in accordance with the relevant comments to the OECD Model Treaty.
This message is most likely to be relevant for all Dutch investors having a trade or business in Denmark and vice versa.
Further information can be obtained from mr Alfred GM Groenen, MCL, KPMG Meijburg & Co, Amsterdam (Netherlands); fax 31 (20) 656 1247
Keywords: Netherlands / Dutch / Europe / EC / EU / European Union / KPMG Meijburg & Co / inward investments / MNE / permanent establishment / Denmark / Danish
Note: The content of this contribution is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
