Tag: Netherlands Antilles

Netherlands vs Crop Tax Advisors, June 2019, Court of the Northern Netherlands, Case No 200.192.332/01

Netherlands vs Crop Tax Advisors, June 2019, Court of the Northern Netherlands, Case No 200.192.332/01

The question at issue was whether a tax adviser at Crop BV had acted in accordance with the requirements of a reasonably competent and reasonably acting adviser when advising on the so-called royalty routing and its implementation and when giving advice on trading. Click here for translation NL royalty routing1 ... Read more
Netherlands vs Tax advisor, June 2019, Court of Northern Netherlands, Case No. 200.193.965/01

Netherlands vs Tax advisor, June 2019, Court of Northern Netherlands, Case No. 200.193.965/01

The question at issue was whether a tax adviser had acted in accordance with the requirements of a reasonably competent and reasonably acting adviser when advising on the so-called royalty routing and its implementation and when giving advice on trading. Click here for other translation NL Royalty routing2 ... Read more
Sweden vs. Nobel Biocare Holding AB, HFD 2016 ref. 45

Sweden vs. Nobel Biocare Holding AB, HFD 2016 ref. 45

In January 2003, a Swedish company, Nobel Biocare Holding AB, entered into three loan agreements with its Swiss parent company. The loans had 15, 25 and 30 maturity respectively, with terms of amortization and with a variable interest rate corresponding to Stibor plus an interest rate margin of 1.75 percent points for one of the loans and 1.5 percent points for the other two loans. The same day the parent company transfered the loans to a sister company domiciled in the Netherlands Antilles. In June 2008 new loan agreements was signed. The new agreements lacked maturity and amortization and interest rates were stated in accordance with the Group’s monthly fixed interest rates. Amortization continued to take place in accordance with the provisions of the 2003 agreement, and the only actual change in relation to those agreements consisted in raising the interest rates by 2.5 percent points. These loans were transferred to a Swiss sister company. The Swedish Tax administration denied tax deductions corresponding to the difference between ... Read more
US vs PepsiCo, September 2012, US Tax Court, 155 T.C. Memo 2012-269

US vs PepsiCo, September 2012, US Tax Court, 155 T.C. Memo 2012-269

PepsiCo had devised hybrid securities, which were treated as debt in the Netherlands and equity in the United States. Hence, the payments were treated as tax deductible interest expenses in the Netherlands but as tax free dividend income on equity in the US. The IRS held that the payments received from PepsiCo in the Netherlands should also be characterised as taxable interest payments for federal income tax purposes and issued an assessment for FY 1998 to 2002. PepsiCo brought the assessment before the US Tax Court. Based on a 13 factors-analysis the Court concluded that the payments made to PepsiCo were best characterised as nontaxable returns on capital investment and set aside the assessment. Factors considered were: (1) names or labels given to the instruments; (2) presence or absence of a fixed maturity date; (3) source of payments; (4) right to enforce payments; (5) participation in management as a result of the advances; (6) status of the advances in relation ... Read more
Canada vs VELCRO CANADA INC., February 2012, Tax Court, Case No 2012 TCC 57

Canada vs VELCRO CANADA INC., February 2012, Tax Court, Case No 2012 TCC 57

The Dutch company, Velcro Holdings BV (“VHBV”), licensed IP from an affiliated company in the Dutch Antilles, Velcro Industries BV (“VIBV”), and sublicensed this IP to a Canadian company, Velcro Canada Inc. (VCI). VHBV was obliged to pay 90% of the royalties received from VCI. within 30 days after receipt to VIBV. At issue was whether VHBV qualified as Beneficial Owner of the royalty payments from VCI and consequently would be entitled to a reduced withholding tax – from 25% (the Canadian domestic rate) to 10% (the rate under article 12 of the treaty between Canada and the Netherlands). The tax authorities considered that VHBV did not qualify as Beneficial Owner and denied application of the reduced withholding tax rate. Judgement of the Tax Court The court set aside the decision of the tax authorities and decided in favor of VCI. Excerpts: “VHBV obviously has some discretion based on the facts as noted above regarding the use and application of ... Read more
Netherlands vs "Dutch Low Risk Treasury B.V.", August 2003, District Court, Case No 01/04083, ECLI:NL:GHAMS:2003:AJ6865

Netherlands vs “Dutch Low Risk Treasury B.V.”, August 2003, District Court, Case No 01/04083, ECLI:NL:GHAMS:2003:AJ6865

This case concerns a Dutch treasury company with a low risk intra-group borrowing and on-lending activity. The interested party was incorporated on 5 August 1995 by a legal person named V Limited, under Canadian law. Its subscribed and paid-up capital amounted to NLG 40,000 in the years under review. The claimant is part of the V group. Its actual activities are described in its “Declaration of data on business start-ups” submitted to the tax authorities as “intra-group financing”. It maintained a bank account with the Bank of Montreal. In the financial years in question, the interested party lent substantial amounts of pounds sterling to its sister company Y Plc, incorporated under the laws of the United Kingdom, in the form of promissory notes and a revolving credit facility with effect from 31 January and 1 February 1996 respectively. The stakeholder obtained the necessary pounds by way of a loan from its sister company Z B.V. The funds borrowed and lent ... Read more