1. How to obtain UAE treaty benefits in practice?
Netherlands, Luxembourg and Belgium
Academy & Finance, Dubai
3 May 2016 – Jan Bart Schober, Tax Partner, Loyens & Loeff

2. Content
Investment Climate in Belgium, the Netherlands, and Luxembourg (“BeNeLux”)
The BeNeLux Markets
Platforms for International Investments
BEPS / ATAP and the Crystall Ball
Claiming Exemption / Refund of Withholding Taxes
Applicable Withholding Taxes
Relevant Treaty Provisions
Domestic Procedural Aspects

3. BeNeLux – Three Countries with Different Markets and Focus …
Labour force: 5.2 million
GDP: USD 455 billion
Logistics
Engineering
Textiles
Petroleum
Belgium
Labour force: 7.7 million
GDP: USD 738 billion
Open economy
Trading nation
Agriculture / agri-food
Information technology
Innovation driven
Gas / wind energy projects
Netherlands
Labour force: 0.4 million
GDP: USD 65 billion
Funds industry
Banking
Steel
Telecommunications
Luxembourg

4. Platforms for International Investments
Goodlogistics
Entrepre-neurship
Skilledlabour
Legal framework
BITs
Stablepolitical arena
Compliance efficiency
Tax efficiency

5. Key Features of Tax Regimes
Luxembourg
The Netherlands
Extensive tax treaty network (also note bilateral investment treaty network)
Participation exemption regime
No withholding tax on outbound interest and royalty payments
Various possibilities for repatriation without dividend tax (e.g. different classes of shares)
Various possibilities for repatriation without dividend tax (e.g. use of Dutch cooperative)
Approachable tax authorities and clear APA / ATR policies
Product laws for funds industry (e.g. SICAR law and SIF law), including tax exemptions
Domestic tax incentives (e.g. IP, environmental, expats)

6. International Tax Developments – What’s Going On … ?!
Globally
OECD / G20 BEPS Project
Final reports published in September 2015
4 themes: Transparency, Mismatches, Anti-abuse and Transfer pricing
15 Action Points
European Union
EU Anti Tax Avoidance Package
Proposal of 28 January 2016
EU Anti Tax Avoidance Directive
EU council vote on 25 May 2016
Recommendation Treaty issues, CbCR Directive, Communiation on EU External Strategy
CCCTB
Re-launch June 2015
Public consultation ended 8 January 2016 New proposal expected in the course of 2016

7. Position of The Netherlands and Luxembourg
Combatting ‘tax haven’ label and EU state aid allegations
Proactive supporter of BEPS Project
Currently holds EU Council Presidency – so the pressure is on …
Pushing for an agreement on automatic exchange of information between tax authorities
Ministry of Finance: “EU Anti Tax Avoidance Package should be ready before summer 2016”
Luxembourg
Combatting ‘blacklisting’, impact of ‘Luxleaks’ and EU state aid allegations
Early adopter of Common Reporting Standard + abolished banking secrecy

8. Looking into the ‘Crystal Ball’ (1)
“The Netherlands and Luxembourg continue to be well-positioned international platform jurisdictions both for tax and non-tax reasons”
However, do not underestimate impact of BEPS and EU initiatives …
Quick and dirty’ treaty shopping is history!!
Surge in transparency will give rise to ample discussions and litigation
Within EU, the ‘crown jewels’ of tax regimes are no longer safe indefinitely
IP regimes in EU are under pressure

9. Looking into the ‘Crystal Ball’ (2)
Joint venture structure
UAE EU
JVco
EU Opco
Manager
Investors
Fund
Opco
Fund structure
Funding structure
UAE
EP1
EP2
Issuer
Bonds
Loans
Security arrangements
Sales
support structure
UAE
EU Distr.
SSco

10. BeNeLux Withholding Taxes & How to Claim Exemption / Refund?

11. UAE BeNeLux Can I claim treaty benefits? Which forms do I need?
Do I get a refund?
Dividend, Interest or Royalty payment
How long does this take?
BeNeLux
Should the payee or payer make a claim?
Exemption at source?

12. BeNeLux – Domestic Withholding Tax Rates
Belgium
Netherlands
Luxembourg
Dividend
27% or 0%*
15%
Interest
27%
Not applicable
Royalty *
0% rate applies if (i) automatic exchange of information takes place with the payee state on the basis of a tax treaty (ii) 10% shareholding in Belgian payer (iii) 12 month holding period (iv) recipient is resident of payee state (v) payee has a comparable legal form and (vi) the payee is similarly subject to tax in the payee state.
The rates may be reduced as all three countries have concluded DTAs with the UAE:
Belgium 1996 (in force since 2004)
Netherlands 2007 (in force since 2010)
Luxembourg 2005 (in force since 2009)

13. BeNeLux Tax Treaties with UAE: Dividends, Interest and Royalties
Belgium (1996)
Netherlands (2007)
Luxembourg (2005)
0% dividend / interest / royalty rate:
The state of the UAE
A political subdivision or local authority
Certain listed financial institutions
5% dividend rate: corporate shareholder owning 25% or more
10% dividend rate: the rest
5% interest and royalties
0% dividend rate:
A political subdivision or local government
UAE central bank
A pension fund
ADIA and ADIC
State-owned institutions recognized as integral part of the Government (subject to MAP)
5% dividend rate: other corporate shareholders owning 10% or more
0% interest and royalties
A local authority
Qualifying financial institution
5% dividend rate: other corporate shareholder owning 10% or more

14. BeNeLux Tax Treaties with UAE: Residence
Belgium (1996)
Netherlands (2007)
Luxembourg (2005)
Person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management
In addition:
State of the UAE,
a political subdivision or local authority,
financial institutions controlled by the State, a political subdivision or local authority
a local government, local authority or governmental institution thereof
UAE nationals, provided that they are a resident only of the UAE,
Companies with their effective place of management in the UAE
a local government, local authority or governmental institution thereof,
UAE nationals
Foreign nationals that are considered a resident of the UAE
Companies or legal entities created under UAE law
Specifically named:
ADIA
Zayed Charity Foundation
UAE Central bank
Abu Dhabi Fund for Economic Development

15. Exemption / Refund Mechanics
Two ways of enjoying a reduced withholding tax rate:
Reduction at source – payer is not obliged to withhold and pay tax (or only the lower applicable rate)
Refund procedure – payer has withheld tax and payee claims a refund

16. Exemption / Refund Mechanisms – Reduction at Source (procedure)
Belgium
Netherlands
Luxembourg
Portfolio – Form 276div
UAE recipient should request UAE MoF to sign to confirm UAE residency
UAE recipient files the signed form with the Belgian authorities within 10 days after dividend declaration
Participation – Form 276div
Same procedure
Tax return: always.
Portfolio – Form IB92 Universeel:
UAE recipient provides the signed form to the Dutch payer
Participation – Request letter
Dutch payer files a request with the Dutch tax authorities
Dutch tax inspector issues a decision (open for appeal). Granted approval is valid for 4 years if situation remains unchanged.
Tax return: only if tax is due.
Portfolio – Modèle 901bis:
UAE recipient provides the signed form to the Luxembourg payer
Participation – Modèle 901bis

17. Exemption / Refund Mechanisms – Reduction at Source (information)
Belgium
Netherlands
Luxembourg
Information required
Name and address of UAE recipient and the authorised representative
Name and address of the Belgian payer
Particulars regarding the dividend payment
Beneficial ownership confirmation
Information required in form
Name, address and place of establishment of the UAE recipient;
Name and address of the Dutch payer;
Dividend related information;
Declarations regarding beneficial, no p.e. and treaty requirements
Other information in request letter
Share capital of Dutch payer;
Interest in Dutch payer;
Confirmation that UAE recipient has a capital divided into shares;
Confirmation that payment has been made to the UAE.
Name and address of UAE resident and the authorised representative
Name and address of the Luxembourg payer
Number, nature and form of shares of Luxembourg payer
Gross dividend, date of attribution, withholding tax payable pursuant to Luxembourg legislation, application of the tax treaty and amount to be exempted or refunded.
Luxembourg payer may be required to furnish details to substantiate the presence of a ‘qualifying shareholding’

18. Exemption / Refund Mechanisms – Refund (procedure)
Belgium
Netherlands
Luxembourg
Portfolio – Form 276div
UAE recipient should request UAE MoF to sign to confirm UAE residency
UAE recipient provides the signed form to the Belgian tax authorities
Participation – Form 276div
Same procedure
Portfolio – Form IB92 Universeel:
UAE recipient provides the signed form to the Dutch tax authorities together with a ‘dividend note’.
Participation – Request letter
UAE recipient makes a request to the Dutch payer
Dutch payer files a request with the Dutch tax authorities
Dutch tax inspector issues a decision (open for appeal)
Portfolio – Modèle 901bis:
UAE recipient provides the signed form to the Luxembourg payer
Participation – Modèle 901bis

19. Exemption / Refund Mechanisms – Refund (timing)
Belgium
Netherlands
Luxembourg
Filing of refund request
5 years as from 1 January in the year the dividend was declared
Timing of refund
Refund may take up to 1 year (no interest compensation)
3 years as from the expiration of the year in which the dividend tax was levied
Refund generally takes a few weeks up to 2 months (no interest compensation)
5 years after the dividend was paid out
Refund generally takes a few months (no interest compensation)

20. Jan Bart Schober International tax partner Head of Dubai office
Jan Bart Schober (1975) is a member of the International Tax practice group and heads the Dubai office. He advises multinational companies, financial institutions and funds on cross-border transactions. Jan Bart has extensive experience in structuring investments in E&P assets by oil and gas companies, as well as on acquisitions, joint ventures and corporate restructurings in the energy industry. Furthermore, he has a strong focus on financing transactions, such as securitisations and repackagings. Previously, he has worked in the Amsterdam and London offices of Loyens & Loeff.
Jan Bart frequently lectures on tax law on various occasions. He is a board member of the IFA GCC branch and a member of the Dutch Association of Tax advisers (NOB) and the Dutch Association for Tax Research.