The changes of the tax treaty between the United States and The Netherlands has entered into force on 28 December 2004.  

On March 8, 2004 the Dutch Ministry of Finance announced that the Dutch Government has reached an agreement with the Government of the United States on amendments to the existing tax treaty.

The changes are aimed to reduce the tresholds for foreing investment. The main changes are:

1. Reduction of the withholding tax rate on dividends paid to qualifying corporate shareholders (>25%) from 5% to 0% 
2. Provision to avoid abuse of the 0% withholding tax rate on dividends 
3. Conditional reduction of the US branch tax from 5% to 0% 
4. Fiscal recognition of mutual pension plans for expatriates 
5. Relaxation of the "limitation on benefits" clause

The changes are laid down in a protocol.

For the comments of both governments on the changes provided by the protocol we refer to the final exchange of notes.

Teh 0% rate for corporate dividends applies as from 1 February 2005.  The other changes apply as from 1 January 2005.  The taxpayer has the option to apply for the provisions of "the old treaty" during a maximum period of 12 moths.

If you require more information please feel free to contact us via e-mail or to call us at our office at the number  31 (10) 2010466.