This is contribution number nine by KPMG Meijburg & Co regarding the practical experience with the 1992 US-Netherlands tax treaty.
This article is most likely to be relevant for investments by Dutch intermediate (holding, financing, mixer and royalty) companies in the United States.
Netherlands - United States:
On December 6, 1994, the Dutch Ministry of Finance reported on the most recent developments regarding the application of the new Dutch-US tax treaty (i.e. covering the period May 1994 - October 1994). According to the statement 20 Dutch companies requested an article 26-statement from the Dutch tax authorities. In such statement the Dutch tax authorities confirm, that in their opinion the Dutch company qualifies for treaty protection under one of the specific tests of article 26. At short notice 15 requests received a positive response and 5 requests are still under investigation. In addition it was revealed that more than 20 Dutch companies requested the IRS for the application of the discretionary benefit provision. About 4 requests have already been granted, whereas the IRS has not yet contacted the Dutch tax authorities informing them about their intention to refuse the application in any of the other cases.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Further information can be obtained from Mr Alfred GM Groenen, MCL, KPMG Meijburg & Co, Amsterdam (Netherlands); fax 31 (20) 656 1247
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