This Order may be cited as the Tax Information Exchange Agreement (Taxes on Income) (Netherlands Antilles) Order 2005.
To be appointed: the date of entry into force will in due course be published in the London, Edinburgh and Belfast Gazettes.
(1) It is declared that the arrangements specified in the Convention set out in Part I of the Schedule to this Order, and the Exchange of Notes constituting an Agreement set out in Part II of that Schedule have been made with the Government of the Kingdom of the Netherlands in respect of the Netherlands Antilles with a view to the exchange of information foreseeably relevant to the administration or enforcement of—
(a) the domestic laws of the United Kingdom concerning income tax, capital gains tax or corporation tax; and
(b) the laws of the Netherlands Antilles concerning taxes imposed by the law of the Netherlands Antilles which are of a similar character to any of those taxes.
(2) It is further declared that it is expedient that the arrangements referred to in paragraph (1) should have effect.
To be appointed: the date of entry into force will in due course be published in the London, Edinburgh and Belfast Gazettes.
A K Galloway
Clerk of the Privy Council
The Tax Information Exchange Agreement between the United Kingdom and the Netherlands Antilles is set out in the Schedule to this Order.
Article 1 of the Order provides for its citation.
Article 2 makes a declaration as to the effect and content of the arrangements set out in the Agreement contained in Part I, and the exchange of Notes contained in Part II of the Schedule to the Order, and that it is expedient that those arrangements should have effect.
The Tax Information Exchange Agreement secures application in the Netherlands Antilles of the same measures as are contained in Council Directive 2003/48/EC on taxation of savings income in the form of interest payments (“the Directive”). It is based on a model reflecting the provisions of the Directive, which was proposed by the Government of the Kingdom of the Netherlands and approved by the EU Council of Ministers.
The Agreement constitutes a reciprocal arrangement between the United Kingdom and the Netherlands Antilles for the exchange of information on savings income in the form of interest payments made cross-border from one Party to individuals resident in the other Contracting Party.
As the Agreement enshrines all the measures corresponding to the Directive, it provides not only for the exchange arrangements between competent authorities but also the details of the mechanisms to be followed by paying agents for the identification of individual owners, and for collecting the information to be exchanged.
For an initial transitional period corresponding to the transitional period in the Directive, the Netherlands Antilles will levy a withholding tax on relevant payments, unless the individual owner opts for the interest to be reported. (This arrangement corresponds to the transitional provisions granted under the Directive to Austria, Belgium and Luxembourg.) Income generated by the withholding tax will be shared with the United Kingdom, and relieved in the same manner as in withholding tax is to be relieved under the Directive.
The United Kingdom will apply automatic exchange of information from the start of the Agreement. At the end of the transitional period, however, both parties will apply full automatic exchange of information in respect of the information covered by the Agreement.
The detailed provisions of the Agreement are as follows.
Article 1 sets out the scope of the Agreement.
Article 2 provides definitions, including the definitions corresponding to those in the Directive of beneficial owner, paying agent and interest.
Article 3 sets out the procedures to be followed to identify the beneficial owners of savings income and their residence.
Article 4 provides for the categories of information to be exchanged automatically, both during the transitional period and thereafter.
Articles 5 to 9 provides details of the transitional withholding tax, confirms that the Netherlands Antilles will share 75% of the revenue obtained from the withholding tax with the United Kingdom and provides that the United Kingdom will make provision to ensure income subject to retention is not subject to double taxation.
Article 10 provides for transposition of the Agreement by each party.
Articles 12 to 13 deal with commencement and the conditions for application of the Agreement.
The Agreement will enter into force on the thirtieth day after the date of the later of the notifications by each country of the completion of its legislative procedures. It will take effect on 1st January 2005 or the date of application of the Directive, whichever is later. The date of application of the Directive is 1st July 2005.
The date of entry into force will in due course be published in the London, Edinburgh and Belfast Gazettes.
