Dividend tax imposed by European company established in Singapore

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According to advocate general Wattel, the court was right to classify the son and the tax adviser as de facto directors of X bv. X bv is then controlled from the Netherlands and the inspector was right to impose dividend tax on X e.g.

Interested party, X bv, is a company incorporated under Netherlands law. In 2006, X bv changed its location address to an address in Singapore and also moved the formal seat of the board to that country. X bv pays dividends in 2010 to P, its sole shareholder, who at that time lives at Sint Maarten. X bv was also advised from the Netherlands and the Netherlands Antilles when the dividends were paid. It is in dispute whether the Netherlands is entitled to levy a dividend tax on P, so that X bv is subject to the obligation to content. Judges decided that X bv is not run and run from Singapore. The treaty with Singapore is not in the way of Dutch taxation. According to Hof Den Haag, X bv was ‘led and governed’ in 2010 by the tax advisers in the Netherlands and the son of P. de inspector living in the Netherlands thus shows that the relevant key decisions were taken neither by the Singapore Management nor by Y on Sint Maarten. Because X bv is ‘run and run’ from the Netherlands, it is exclusively resident of the Netherlands. X bv Goes on appeal.

Advocate general Wattel considers that the court’s opinion is sufficiently reasoned. The A-G notes, however, that it may be unusual for a tax consultant to be regarded as de facto directors together with the son of the dga, but that this also applies to the fact that a large-distance trust office operates such a Dutch company for € 5500 a year. Furthermore, the court’s decisions, P is rightly regarded as a aandeelhoudersbesluiten and bewijsrisico for a few ambiguous cases, such as the whereabouts of P at the time of the administrative kernbesluiten, at the risk of X is bv this time. The judgment of the court that X bv is not based on Sint Maarten is also correct according to the A-G. The Caribbean fiscus does not regard X bv as a resident and the Caribbean tax adviser as merely an executor. The A-G therefore advises The Hoge Raad to dismiss the appeal in Cassation as unfounded, but still calls on the Hoge Raad to explain certain concepts.

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