Amendment Tax Treaty with Tunisia

The Tax Treaty with Tunisia is undergoing an amendment.

The Netherlands uses the opportunity offered by the treaty to terminate the additional tax sparing credit. The amendment will come into effect on 1 January 2011.

A tax sparing credit means that the Netherlands sets off more taxes than the taxes that have actually been paid in the source country. The measure was originally intended in order not to counteract the lower rates used by Tunisia so as to attract investments for the stimulation of the economy by still levying in full in the Netherlands. But because the treaty does not refer to specific stimulating measures, the Netherlands actually grants a general subsidy to investments in Tunisia.

The Tax Treaty between the Netherlands and Tunisia dates from 1995. It lays down that the tax sparing credit can be terminated after fifteen years. The Netherlands uses this opportunity, also because of the fact that such agreements have not been made with similar countries in the region (such as Morocco).

The measure will lapse on 15 December 2010 and the amendment will come into effect on 1 January 2011. The Tax Treaty with Tunisia will remain unchanged on all other points.