KPMG comments on the possibility for Antilles entities to obtain passive investment company status in the Netherlands.
This is contribution number 26 by KPMG Meijburg & Co regarding Antilles companies obtaining passive investment company status in the Netherlands.
On October 20, 1995, the Undersecretary of Finance issued the following statement.
"Pursuant to article 28 of the 1969 Corporate Income Tax Act (hereafter: the Act), only Netherlands-resident public limited companies, private companies with limited liability and funds for joint account of their participants can be qualified as passive investment companies. For the application of this provision, public limited companies and private companies with limited liability are understood to mean companies incorporated under Netherlands law.
I have been asked whether a public limited company which has been incorporated under Netherlands Antilles law and is actually resident in the Netherlands can obtain the status of passive investment company as meant in article 28 of the Act. In this respect I can observe the following.
In my opinion, a public limited company which has been incorporated under Netherlands Antilles law and is actually resident in the Netherlands can be eligible for the application of article 28 of the Act, provided that the conditions of this provision are met in all other respects. My considerations on this point have been as follows. The nature and organization of a public limited company incorporated under Netherlands Antilles law show such a resemblance to those of a public limited company incorporated under Netherlands law that, given the provision of article 1, first paragraph, of the Tax Arrangement between the Netherlands and the Netherlands Antilles, a company which is liable without restriction to corporate income tax as a resident taxpayer should not be treated any differently as regards the application of article 28 of the Act. I have thereby taken into account that the circumstance that the incorporation of the company took place under the law of the Netherlands Antilles does not have such consequences, within the scope of article 28 of the Act, that one cannot speak of a company which finds itself in equal circumstances as compared to a company incorporated under Dutch law.
As regards other companies which have been incorporated under foreign law and are actually resident in the Netherlands, no concrete cases have yet been submitted to me in this respect. For the moment, therefore, my standpoint about the application of article 28 of the Act only involves public limited companies incorporated under Netherlands Antilles law."
This message is most likely to be relevant for passive investors.
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 / fringe benefits / debt-push-down / mergers & acquisitions / Antilles / passive investment company
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