The Netherlands: Treaties and Tax Information Exchange Agreements

This is a technical explanation of the Protocol signed at Washington on March 8, 2004 (the “Protocol”), amending the Convention between the United States of America and the Kingdom of the Netherlands for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, signed at Washington on December 18, 1992 (the “1992 Convention”), as amended by a protocol signed at Washington on October 13, 1993 (the “1993 Protocol”). The term “Convention” refers to the 1992 Convention as modified by both the 1993 Protocol and the Protocol. Negotiations took into account the U.S. Treasury Department’s current tax treaty policy and the Treasury Department’s Model Income Tax Convention, published on September 20, 1996 (the “U.S. Model”). Negotiations also took into account the Model Tax Convention on Income and on Capital, published by the Organization for Economic Cooperation and Development, as updated in January 2003 (the “OECD Model”), and recent tax treaties concluded by both countries. The Technical Explanation is an official guide to the Protocol. It reflects the policies behind particular Protocol provisions, as well as understand ings reached with respect to the application and interpretation of the Protocol and the 1992 Convention. This Technical Explanation should be read together with the Technical Explanation to the 1992 Convention with respect to provisions that have not been modified. The Protocol was accompanied by a detailed Understanding, implemented through an exchange of notes, indicating the views of the negotiators and of the States with respect to a number of provisions of the Convention. The Understanding supersedes the Understanding accompanying the 1992 Convention and the related exchange of notes accompanying the 1993 Protocol. The portions of the Understanding that have been added (as opposed to being merely repeated) are discussed in connection with the relevant portions of the Protocol.