Convention between the Kingdom of the Netherlands and the Swiss Confederation for the avoidance of double taxation with respect to taxes on income:bijlage

Convention between the Kingdom of the Netherlands and the Swiss Confederation for the elimination of double taxation with respect to taxes on income and the prevention of tax evasion and avoidance

Protocol

Geldend

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With respect to the Convention concluded between the Kingdom of the Netherlands and the Swiss Confederation for the elimination of double taxation with respect to taxes on income and the prevention of tax evasion and avoidance, the undersigned have agreed that the following provisions shall form an integral part of the Convention.

I. General

1

In case an item of income is derived from a Contracting State through an entity that is fiscally transparent under the laws of either Contracting State and is organised in one of the Contracting States or in a third State, the first-mentioned State shall grant the benefits of the Convention with respect to that item of income to the person that is a resident of the other Contracting State according to the laws of that other State, to the extent that that person is taxed for that item of income and satisfies any other conditions specified in the Convention.

2

Notwithstanding the provision of paragraph 1, in case an item of income is derived from a Contracting State through an entity that is fiscally not transparent under the laws of that State and is organised in that State, that Contracting State shall not grant the benefits of the Convention with respect to that item of income.

3

Notwithstanding the provision of paragraph 1, in case an item of income is derived from a Contracting State through an entity that is fiscally transparent under the laws of that State and is organised in that State or in a third State, that Contracting State shall grant the benefits of the Convention with respect to that item of income to a resident of the other Contracting State, provided that item would have been exempt from tax under the laws of that other State, if it had been directly derived by that resident, and that resident satisfies any other conditions specified in the Convention.

II. Ad Article 3 paragraph 1 j)

It is understood that the term ‘pension fund’ includes the following funds and any identical or substantially similar funds which are established pursuant to legislation introduced after 1 January 2018:

a)

in the Netherlands, any pension fund covered by:

(i)

the Pension Act (Pensioenwetdc);

(ii)

the Mandatory Participation in an Industry-wide Pension Fund (Wet verplichte deelneming in een bedrijfstakpensioenfonds 2000);

(iii)

)he Mandatory Pensions for Professional Groups Act (Wet verplichte beroepspensioenregeling);

(iv)

the Act on the Notary Office (Wet op het notarisambt);

(v)

the Act on Financial Supervision (Wet op het financieel toezicht);

b)

in Switzerland, any pension fund covered by:

(i)

the Federal Act on old age and survivors’ insurance of 20 December 1946;

(ii)

the Federal Act on disabled persons’ insurance of 19 June 1959;

(iii)

he Federal Act on supplementary pensions in respect of old age, survivors’ and disabled persons’ insurance of 6 October 2006;

(iv)

the Federal Act on income compensation allowances in case of service and in case of maternity of 25 September 1952;

(v)

the Federal Act on old age, survivors’ and disabled persons’ insurance payable in respect of employment or self-employment of 25 June 1982, including pension funds which offer individual recognised pension plans comparable with occupational pension plans and non-registered pension funds which offer occupational pension plans in the meaning of:

–

the Federal Act on Vested Benefits of 17 December 1993;

–

paragraph 6 and paragraph 7 of Article 89a of the Swiss Civil Code of 10 December 1907;

–

paragraph 1 of Article 331 of the Federal Act on the Amendment of the Swiss Civil Code (Part Five: The Code of Obligations) of 30 March 1911.

III. Ad Article 3, paragraph 2, and Article 25

It is understood that, if the competent authorities of the Contracting States by mutual agreement have reached a solution, within the context of the Convention, for cases in which double taxation or double exemption would occur:

a)

as a result of the application of paragraph 2 of Article 3 with respect to the interpretation of a term not defined in the Convention; or

b)

as a result of differences in classification (for example of an element of income or of a person);

this solution, after publication thereof by both competent authorities, shall for the application of the Convention also be binding in other similar cases in the application of the Convention as long as the competent authorities have not published a different decision.

IV. Ad Article 4, paragraph 1

1

The term ‘resident of a Contracting State’ shall include an organisation that is established and is operated exclusively for religious, charitable, scientific, cultural, sporting or educational purposes (or for more than one of those purposes) and that is a resident of that State according to its laws, notwithstanding that all or part of its income or gains may be exempt from tax under the domestic law of that State.

2

The term ‘resident of a Contracting State’ shall also include a pension fund.

V. Ad Article 4

An individual living aboard a ship or a boat 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 or the boat has its home harbour.

VI. Ad Articles 5, 6, 7, 13 and 23

It is understood that with respect to the Netherlands, rights to the exploration and exploitation of natural resources shall be regarded as immovable property located in the Contracting State to whose seabed — and subsoil thereof — these rights apply, and that these rights are regarded as assets of a permanent establishment in that State. Furthermore, it is understood that the aforementioned rights include rights to interests in, or benefits from assets that arise from, that exploration or exploitation.

VII. Ad Article 5, paragraph 3

For enterprises resident of a Contracting State and having started their activities on a building site or construction or installation project in the other Contracting State before the entry into force of the new Convention, the existence or not of a permanent establishment in the other State is determined according to the rules of the Convention of November 12, 1951, as supplemented by a Supplementary Protocol of November 12, 1951, and as amended by the Supplementary Convention of June 22, 1966.

VIII. Ad Article 7, paragraphs 1 and 2

In respect of paragraphs 1 and 2 of Article 7, where an enterprise of a Contracting State sells goods or merchandise or carries on business in the other Contracting State through a permanent establishment situated therein, the profits of that permanent establishment shall not be determined on the basis of the total amount received by the enterprise, but shall be determined only on the basis of that portion of the income of the enterprise that is attributable to the actual activity of the permanent establishment in respect of such sales or business. Specifically, in the case of contracts for the survey, supply, installation or construction of industrial, commercial or scientific equipment or premises, or of public works, when the enterprise has a permanent establishment, the profits attributable to such permanent establishment shall not be determined on the basis of the total amount of the contract, but shall be determined only on the basis of that part of the contract that is effectively carried out by the permanent establishment in the Contracting State where the permanent establishment is situated. The profits related to that part of the contract which is carried out by the head office of the enterprise shall be taxable only in the Contracting State of which the enterprise is a resident.

IX. Ad Article 4, Article 10, paragraphs 1 and 2 and Article 21

1

It is understood that a Dutch tax exempt Investment Institution (‘vrijgestelde beleggingsinstelling’), a Swiss contractual fund (‘fonds commun de placement’), a Swiss open ended investment fund (société d’investissement à capital variable’) and a Swiss limited partnership for collective capital investment (‘société en commandite de placements collectifs’) are not residents of one or both of the Contracting States.

2

Notwithstanding paragraph 1 and paragraphs 1 and 2 of Article 10 and Article 21:

a)

the Netherlands shall not be prevented from applying its domestic tax law with respect to an interest in a tax exempt Investment Institution (‘vrijgestelde beleggingsinstelling’), but if the beneficial owner of such an interest is a resident of Switzerland, the tax so charged shall not exceed 15 per cent of the gross amount of the income so taxed.

b)

Switzerland shall not be prevented from applying its domestic tax law with respect to income on an interest in a Swiss contractual fund (‘fonds commun de placement’), a Swiss open ended investment fund (‘société d’investissement à capital variable’) and a Swiss limited partnership for collective capital investment (‘société en commandite de placements collectifs’) under the Federal Act on Collective Investment Schemes of 23 June 2006, but if the beneficial owner of such income is a resident of the Netherlands, the tax so charged shall not exceed 15 per cent of the gross amount of the income so taxed.

3

In respect to paragraph 2, subparagraphs a and b, the provisions of Article XIII and Article 22 shall apply accordingly.

X. Ad Article 10, paragraph 3

1

The provisions of paragraph 3 of Article 10 shall not apply to a person who is a fiscal investment institution (‘fiscale beleggingsinstelling’) for the purposes of the Netherlands company tax.

2

Further, the provisions of paragraph 3 of Article 10 shall apply to a premium pension institution only to the extent that the dividend income relates to a pension plan of an employer which is a resident of the Netherlands.

XI. Ad Article 10, paragraph 6, Article 11, paragraph 3, and Article 13

Notwithstanding the provisions of paragraph 6 of Article 10, paragraph 3 of Article 11 and Article 13, it is understood that payments on a loan, including payments on value changes of the loan, shall be treated as a dividend insofar as these payments are treated as a distribution by the tax laws of the Contracting State of which the company making the payments is a resident.

XII. Ad Article 10, paragraph 9

Where a resident of Switzerland receives dividends that may be taxed in the Netherlands in accordance with paragraph 9 of Article 10, the Netherlands shall grant a refund. The amount of this refund shall be equal to the tax due in Switzerland on this income but shall in no case exceed 10 per cent of this income.

XIII. Ad Articles 10, 11 and 12

Applications for relief at source or the refund of the excess amount of tax have to be lodged with the competent authority of the State levying or having levied the tax, based on an official certificate of residence from the tax authorities of the other Contracting State and in conformity with the national laws and regulations of the State levying or having levied the tax.

XIV. Ad Articles 10 and 13

1

It is understood that income received in connection with the (partial) liquidation of a company or a purchase of own shares by a company is treated as income from shares and not as capital gains. The credit for tax at source shall be granted for the tax period in which the income is taxed in the State of residence.

2

It is understood that in case of an assessment as mentioned in paragraph 9 of Article 10 and paragraph 6 of Article 13, postponement of payment shall be granted under the condition that standing security be given.

XV. Ad Article 13, paragraph 6

1

It is understood that the provisions of paragraph 6 of Article 13 shall only apply to an accrual of the value of the shares to which that paragraph applies during a period in which the individual was a resident of the Netherlands.

2

It is understood that, where the postponement of payment of the outstanding assessment is ended due to the alienation of the shares, ‘jouissance’ rights or debt-claims to which paragraph 6 of Article 13 applies, a remission of tax is given if at the moment of alienation the market value of these shares, rights or claims has decreased in comparison to their value at the moment of emigration, insofar as the decrease was not caused by a distribution of profits or a refund of paid-up capital. The given amount of remission is equal to 25 per cent of the difference between the market value of these shares, rights or claims at the moment of alienation and their value at the moment of emigration.

3

When according to paragraph 2 remission of tax is given for the purpose of the Wet inkomstenbelasting 2001, the value of the shares, ‘jouissance’ rights or debt-claims at the moment of emigration shall be decreased by four times of the amount of tax that is remitted.

XVI. Ad Article 25

The competent authorities of the Contracting States may also agree, with respect to any agreement reached as a result of a mutual agreement procedure as meant in Article 25, if necessary contrary to their respective national legislation, that the State in which there is an additional tax charge as a result of the aforementioned agreement shall not impose any increases, surcharges, interest and costs with respect to this additional tax charge, if the other State in which there is a corresponding reduction of tax as a result of the agreement refrains from the payment of any interest due with respect to such a reduction of tax.

XVII. Ad Article 26

a)

It is understood that an exchange of information will only be requested once the requesting Contracting State has pursued all means available to obtain information available under the internal taxation procedure.

b)

It is understood that the tax authorities of the requesting State shall provide the following information to the tax authorities of the requested State when making a request for information under Article 26 of the Convention:

(i)

information sufficient to identify the person(s) under examination or investigation, in particular name, and, to the extent known, address, account number, and other particulars facilitating that persons identification, such as date of birth, marital status, tax identification number;

(ii)

the period of time for which the information is requested;

(iii)

a statement of the information sought including its nature and the form in which the requesting State wishes to receive the information from the requested State;

(iv)

the tax purpose for which the information is sought;

(v)

the name and, to the extent known, address of any person in possession of the requested information.

c)

The purpose of referring to information that may be foreseeable relevant is intended to provide for exchange of information in tax matters to the widest possible extent without allowing the Contracting States to engage in ‘fishing expeditions’ or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer. While paragraph b contains important procedural requirements that are intended to ensure that fishing expeditions do not occur, subparagraphs (i) through (v) nevertheless need to be interpreted with a view not to frustrate effective exchange of information.

d)

Although Article 26 of the Convention does not restrict the possible methods for exchanging information, it shall not commit a Contracting State to exchange information on an automatic or spontaneous basis. The Contracting States expect to provide information to one another necessary for carrying out the provisions of the Convention.

e)

It is understood that in case of an exchange of information, the administrative procedural rules regarding taxpayers' rights provided for in the requested Contracting State remain applicable before the information is transmitted to the requesting Contracting State.

f)

It is understood that the carrying out of the income-related regulations in the Netherlands is typically another purpose as meant in the last sentence of paragraph 2 of Article 26.

IN WITNESS whereof the undersigned, duly authorised thereto, have signed this Protocol.

DONE at The Hague, this 26th day of February 2010, in duplicate, in the Netherlands, French and English languages, the three texts being equally authentic. In case there is any divergence of interpretation between the Netherlands and French texts, the English text shall prevail.

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