New U.S.-Netherlands income tax treaty continues Netherlands Antilles interest exemption.

• Author: Blum, Richard A.
• Position: Brief Article

The United States and the Netherlands signed a new income tax treaty on Dec. 18, 1992 that will replace the existing treaty that came into force in 1947. The new treaty generally will enter into force 30 days after ratification by both countries.

The old treaty was extended to the Netherlands Antilles in 1955. On June 29, 1987, the United States announced that it would terminate this extension effective Jan. 1, 1988. However, on July 10, 1987, the Treasury announced that the provisions of the treaty extension relating to the withholding tax exemption for interest (Article VIII) would remain in force.

The new treaty provides for the continuation of the old treaty to the extent it applies to the Netherlands Antilles. Paragraphs 3 and 4 of Article 37 ("Entry Into Force") of the new treaty state the following:

3. Subject to the provisions of paragraph 4, the prior Convention shall cease to have effect...