The Netherlands and Malawi have signed a revised tax treaty that includes antiabuse provisions preventing the benefits of the treaty from being used solely to avoid tax, The Netherlands government said on April 23.
Dutch Minister for Foreign Trade and Development Cooperation Lilianne Ploumen said that the antiabuse provisions, which relate to taxes on dividends, interest, and royalties, will help fight tax avoidance. The Netherlands has decided to renegotiate 23 treaties signed with developing nations to add antiabuse clauses, Plouman said.
Under the new treaty, dividends will be subject to 5 percent withholding tax in the case of shareholdings of at least 10 percent, and 0 percent for pension funds. The standard tax rates in both countries will apply to other dividends. Interest will be taxed at 10 percent and royalties at 5 percent, The Netherlands government said.
The treaty also includes provisions on exchange of tax information and on administrative assistance to combat tax avoidance and evasion. “The revised treaty will enable the tax authorities in Malawi and the Netherlands to work together better,” State Secretary for Finance Eric Wiebes said.
The agreement was signed in Washington by Ploumen, and Malawi’s Finance Minister Goodall Gondwe.
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