Convention between the Government of the Kingdom of the Netherlands and the Government of the Kingdom of Saudi Arabia for the avoidance of double taxation and the prevention of tax evasion with respect to taxes on income:bijlage

Convention between the Government of the Kingdom of the Netherlands and the Government of the Kingdom of Saudi Arabia for the avoidance of double taxation and the prevention of tax evasion with respect to taxes on income

Protocol

Geldend

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At the moment of signing the Convention for the avoidance of double taxation and the prevention of tax evasion with respect to taxes on income, this day concluded between the Government of the Kingdom of Saudi Arabia and the Government of the Kingdom of the Netherlands, the undersigned have agreed that the following provisions shall form an integral part of the Convention.

I. Ad Article 4

1

The competent authorities will by mutual agreement settle which legal persons may be considered as residents of a Contracting State as meant in sub-paragraph c (i) of paragraph 1 of Article 4.

2

An individual living aboard a ship without any real domicile in either of the Contracting States shall be deemed to be a resident of the Contracting State in which the ship has its home harbour.

II. Ad Article 5

The following are also deemed to be a permanent establishment:

1.

Any substantial activity (such as maintenance, training and installation) included in a contract for export of goods and merchandise carried on in a Contracting State. However, the business profits derived from the export of the goods and merchandise shall not be subject to tax in that Contracting State.

2.

Any offshore activities (defined as activities carried on on the continental shelf of a Contracting State in connection with the exploration or exploitation of the seabed and its sub-soil and their natural resources).

3.

The rights to explore or extract and exploitation rights of natural resources, including rights to interests in, or to the benefits of, assets to be produced by such exploration or exploitation/extraction.

III. Ad Article 7

1

In the case of contracts for survey, constructions, supply or installations, the profits of a permanent establishment shall not be determined on the total amount of the contract, but shall be determined only on the basis of that part of the contract, which is effectively carried out by the permanent establishment in the State where the permanent establishment is situated. Any portion of the contract executed outside the Contracting State in which the permanent establishment is situated shall not be taken into consideration in determining the profits of that permanent establishment.

2

Each Contracting State may apply its domestic legislation with regard to insurance activities.

IV. Ad Article 9

Any transaction or any agreement between associated enterprises may be reviewed to ensure whether or not the condition as meant in paragraph 1 of this article is fulfilled, but would not, merely because of the relation between the two enterprises, be considered conflicting with the arm's length principle.

V. Ad paragraph 2 (a) Article 10

In case of a significant change of the system on withholding tax on dividends in one of the two Contracting States after the moment of signing this Convention, the Contracting States shall enter into negotiations to insert an anti-abuse provision in the Convention.

VI. Ad Article 16

It is understood that the term ‘the board of directors of a company’ means persons, who are nominated as such by the general meeting of shareholders or by any other competent body and are charged with the general management of the company and the supervision thereof, respectively.

VII. Ad Article 18

Notwithstanding paragraph 1 the other Contracting State may also tax those items of income if they are exempt in the State of residence and until the article has been renegotiated between the two Contracting States when the State of residence introduces such a tax.

VIII. Ad Articles 10, 13 and 23

Notwithstanding Articles 10 and 13 dividends and capital gains accumulated in the period an individual was a resident of the Netherlands before he has become a resident of the Kingdom of Saudi Arabia, may be taxed in the Netherlands according to the laws of the Netherlands 10 years after the emigration of the individual. The Kingdom of Saudi Arabia will apply Article 23 only for that part of such income of the individual that has been accumulated before the individual left the Netherlands if the assessment has been issued on his emigration and insofar the tax has been collected.

IX. General

1

Where tax has been levied at source in excess of the amount of tax chargeable under the provisions of Articles 10, 11 or 12, applications for the refund of the excess amount of tax have to be lodged with the competent authority of the State having levied the tax, within a period of five years after the expiration of the calendar year in which the tax has been levied.

2

As soon as the laws or regulations of the Kingdom of Saudi Arabia give to residents of other countries, except countries that are member of the Gulf Cooperation Counsel and the Arabic League, national treatment with regard to taxation such national treatment will automatically be provided to residents or former residents of the Netherlands.

3

The Kingdom of Saudi Arabia shall with respect to its national laws and regulations treat nationals or residents of the Netherlands for taxation purposes not less favourable than residents or nationals from third countries except countries that are member of the Gulf Cooperation Counsel and the Arabic League.

4

In case the Kingdom of Saudi Arabia introduces any form of dispute resolution mechanism, including binding dispute resolution, with any country in a tax convention the Contracting States shall enter into negotiations to insert an Article concerning dispute resolution.

5

In case the Kingdom of Saudi Arabia introduces an Article concerning the assistance in recovery with any country in a tax convention the Contracting States shall enter into negotiations to insert an Article for the assistance and support in the collection of the taxes to which this Convention applies.

6

Profits which are exempt for a limited period of time not exceeding ten years from tax on income in Saudi Arabia under the provisions of encouragement of its investment laws shall be deemed to be subject to a tax on income for the purpose of the application of the participation exemption by the Netherlands.

IN WITNESS WHEREOF the undersigned, being duly authorized thereto, have signed this Protocol.

DONE in duplicate at Riyadh on 13/10/2008, in the Netherlands, Arabic and English languages, all texts being equally authentic. In case of divergence of interpretation, the English text shall prevail.

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