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2 There shall be regarded as taxes on income and on capital all taxes imposed on total
income, on total capital, or on elements of income or of capital, including taxes
on gains from the alienation of movable or immovable property, as well as taxes on
capital appreciation.
Article 2. General definitions
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2 As regards the application of this Convention by either of the States, any term not
otherwise defined shall, unless the context otherwise requires, have the meaning which
it has under the laws of that State relating to the taxes which are the subject of
this Convention.
Article 3. Fiscal domicile
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1 For the purposes of this Convention, the term “resident of one of the States” means
any person who, under the law of that State, is liable to taxation therein by reason
of his domicile, residence, place of management and control or any other criterion
of a similar nature.
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2 For the purposes of this Convention an individual, who is a member of a diplomatic
or consular mission of one of the States in the other State or in a third State and
who is a national of the sending State, shall be deemed to be a resident of the sending
State if he is submitted therein to the same obligations in respect of taxes on income
and on capital as are residents of that State.
Article 4. Permanent establishment
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5 An enterprise of one of the States shall be deemed to have a permanent establishment
in the other State if it carries on supervisory activities in that other State for
more than six months in connection with a construction, installation or assembly project
which is being undertaken in that other State.
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6 An enterprise of one of the States shall not be deemed to have a permanent establishment
in the other State merely because it carries on business in that other State through
a broker, general commission agent or any other agent of an independent status, where
such person is acting in the ordinary course of his business.
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7 The fact that a company which is a resident of one of the States controls or is controlled
by a company which is a resident of the other State, or which carries on business
in that other State (whether through a permanent establishment or otherwise), shall
not of itself constitute either company a permanent establishment of the other.
Article 5. Limitation of relief
Where under any provision of this Convention income is relieved from tax in one of
the States and under the law in force in the other State, a person, in respect of
the said income, is subject to tax by reference to the amount thereof which is remitted
to or received in that other State and not by reference to the full amount thereof,
then the relief to be allowed under this Convention in the first-mentioned State shall
apply only to so much of the income as is remitted to or received in the other State.
Article 6. Income from immovable property
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2 The term “immovable property” shall be defined in accordance with the law of the State
in which the property in question is situated. The term shall in any case include
rights to variable or fixed payments as consideration for the working of, or the right
to work, mineral deposits or other places of extraction of natural resources. Ships,
boats and aircraft shall not be regarded as immovable property.
Article 7. Business profits
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1 The profits of an enterprise of one of the States shall be taxable only in that State
unless the enterprise carries on business in the other State through a permanent establishment
situated therein. If the enterprise carries on business as aforesaid, the profits
of the enterprise may be taxed in the other State but only so much of them as is attributable
to that permanent establishment.
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2 Where an enterprise of one of the States carries on business in the other State through
a permanent establishment situated therein, there shall in each State be attributed
to that permanent establishment the profits which it might be expected to make if
it were a distinct and separate enterprise engaged in the same or similar activities
under the same or similar conditions and dealing wholly independently with the enterprise
of which it is a permanent establishment.
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3 In the determination of the profits of a permanent establishment, there shall be allowed
as deductions expenses of the enterprise (other than expenses which would not be deductible
if the permanent establishment were a separate enterprise) which are incurred for
the purposes of the permanent establishment including executive and general administrative
expenses so incurred, whether in the State in which the permanent establishment is
situated or elsewhere.
Article 8. Shipping and air transport
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2 If the place of management and control of a shipping enterprise is aboard a ship,
then it shall be deemed to be situated in the State in which the home harbour of the
ship is situated, or, if there is no such home harbour, in the State of which the
operator of the ship is a resident.
Article 9. Associated enterprises
Where -
-
(a) an enterprise of one of the States participates directly or indirectly in the management,
control or capital of an enterprise of the other State, or
-
(b) the same persons participate directly or indirectly in the management, control or
capital of an enterprise of one of the States and an enterprise of the other State,
and in either case conditions are made or imposed between the two enterprises in their
commercial or financial relations which differ from those which would be made between
independent enterprises, then any profits which would, but for those conditions, have
accrued to one of the enterprises, but, by reason of those conditions, have not so
accrued, may be included in the profits of that enterprise and taxed accordingly.
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2 However, dividends paid by a company which is a resident of the Netherlands to a resident
of Singapore may be taxed in the Netherlands, and according to Netherlands law, but
the tax so charged shall not exceed 15 per cent of the gross amount of the dividends.
Where, however, the recipient of the dividends is a company the capital of which is
wholly or partly divided into shares and which holds directly of indirectly at least
25 per cent of the capital of the company paying the dividends, the Netherlands shall
not levy a tax on the dividends.
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3 Dividends paid by a company which is a resident of Singapore to a resident of the
Netherlands shall be exempt from any tax in Singapore which is chargeable on dividends
in addition to the tax chargeable in respect of the profits of the company.
Provided that nothing in this paragraph shall affect the provisions of Singapore law
under which the tax in respect of a dividend paid by a company which is a resident
of Singapore from which Singapore tax has been, or has been deemed to be, deducted
may be adjusted by reference to the rate of tax appropriate to the Singapore year
of assessment immediately following that in which the dividend was paid.
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5 The term “dividends” as used in this Article means income from shares, “jouissance”
shares or “jouissance” rights, mining shares, founders' shares or other rights, not
being debt-claims, participating in profits, as well as income from other corporate
rights assimilated to income from shares by the taxation law of the State of which
the company making the distribution is a resident.
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6 The provisions of paragraphs 1, 2 and 3 shall not apply if the recipient of the dividends,
being a resident of one of the States, has in the other State, of which the company
paying the dividends is a resident, a permanent establishment with which the holding
by virtue of which the dividends are paid is effectively connected. In such a case,
the provisions of Article 7 shall apply.
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7 Where a company which is a resident of one of the States derives profits or income
from the other State, that other State may not impose any tax on the dividends paid
by the company to persons who are not residents of that other State, or subject the
company's undistributed profits to a tax on undistributed profits, even if the dividends
paid or the undistributed profits consist wholly or partly of profits or income arising
in such other State.
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8 If the system of taxation applicable in either of the States to the profits and distributions
of companies is substantially altered the competent authorities may consult each other
in order to determine whether it is necessary for this reason to amend the provisions
of paragraphs 1, 2 and 3 of this Article.
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2 However, such interest may be taxed in the State in which it arises, and according
to the law of that State, but the tax so charged shall not exceed 10 per cent of the
amount of the interest.
-
4 The term “interest” as used in this Article means income from Government securities,
bonds or debentures, whether or not secured by mortgage and whether or not carrying
a right to participate in profits, and debt-claims of every kind as well as all other
income assimilated to income from money lent by the taxation law of the State in which
the income arises.
-
5 The provisions of paragraphs 1 and 2 shall not apply if the recipient of the interest,
being a resident of one of the States, has in the other State in which the interest
arises a permanent establishment with which the debt-claim from which the interest
arises is effectively connected. In such a case, the provisions of Article 7 shall apply.
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6 Interest shall be deemed to arise in one of the States when the payer is that State
itself, a political subdivision, a local authority or a resident of that State. Where,
however, the person paying the interest, whether he is a resident of one of the States
or not, has in one of the States a permanent establishment in connection with which
the indebtedness on which the interest is paid was incurred, and such interest is
borne by such permanent establishment, then such interest shall be deemed to arise
in the State in which the permanent establishment is situated.
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7 Where, owing to a special relationship between the payer and the recipient or between
both of them and some other person, the amount of the interest paid, having regard
to the debt-claim for which it is paid, exceeds the amount which would have been agreed
upon by the payer and the recipient in the absence of such relationship, the provisions
of this Article shall apply only to the last-mentioned amount. In that case, the excess
part of the payments shall remain taxable according to the law of each State, due
regard being had to the other provisions of this Convention.
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3 The term “royalties” as used in this Article means payments of any kind received as
a consideration for the use of, or the right to use, any copyright of scientific work,
any patent, trade mark, design or model, plan, secret formula or process, or for the
use of, or the right to use, industrial, commercial or scientific equipment, or for
information concerning industrial, commercial or scientific experience.
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4 The provisions of paragraphs 1 and 2 shall not apply if the recipient of the royalties
or sums being a resident of one of the States, has in the other State in which the
royalties or sums arise a permanent establishment with which the right or property
giving rise to the said income is effectively connected. In such a case, the provisions
of Article 7 shall apply.
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5 Where, owing to a special relationship between the payer and the recipient or between
both of them and some other person, the amount of the royalties paid, having regard
to the use, right, property or information for which they are paid, exceeds the amount
which would have been agreed upon by the payer and the recipient in the absence of
such relationship, the provisions of the preceding paragraphs of this Article shall
apply only to the last-mentioned amount. In that case, the excess part of the payments
shall remain taxable according to the law of each State, due regard being had to the
other provisions of this Convention.
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6 This Convention shall not apply to payments of any kind received as a consideration
for the use of, or for the right to use, any copyright of literary or artistic work,
including motion picture films and tapes for television or broadcasting, or to sums
from the alienation of any right or property giving rise to such payments.
Article 13. Limitation of articles 10, 11 and 12
International organisations, organs and officials thereof and members of a diplomatic
or consular mission of a third State, being present in one of the States, are not
entitled, in the other State, to the reductions or exemptions from tax provided for
in Articles 10, 11 and 12 in respect of the items of income dealt with in these Articles and arising in that
other State, if such items of income are not subject to a tax on income in the first-mentioned
State.
Article 14. Capital gains
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2 Gains from the alienation of movable property forming part of the business property
of a permanent establishment which an enterprise of one of the States has in the other
State, including such gains from the alienation of such a permanent establishment
(alone or together with the whole enterprise), may be taxed in the other State.
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3 Notwithstanding the provisions of paragraph 2, gains from the alienation of ships
and aircraft operated in international traffic, and movable property pertaining to
the operation of such ships and aircraft shall be taxable only in the State of which
the person carrying on the enterprise is a resident.
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5 Notwithstanding the provisions of paragraph 4, where a person owns 25 per cent or
more of the share capital of a company dealing wholly or mainly with immovable property,
the gains from the alienation of some or all of such shares may be taxed in the State
where such immovable property is situated.
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6 Unless otherwise provided in paragraph 5, the provisions of paragraph 4 shall not
affect the right of each of the States to levy according to its own law a tax on gains
from the alienation of shares or “jouissance” rights in a company the capital of which
is wholly or partly divided into shares and which is a resident of that State, derived
by an individual who is a resident of the other State and has been a resident of the
first-mentioned State in the course of the last five years preceding the alienation
of the shares or “jouissance” rights.
Article 15. Personal services
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1 Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration in respect of an employment as well
as income in respect of professional services or other independent activities of a
similar character, derived by a resident of one of the States, shall be taxable only
in that State, unless the employment, services or activities are exercised or performed
in the other State. If the employment, services or activities are so exercised or
performed, such remuneration or income as is derived therefrom may be taxed in that
other State.
-
2 Notwithstanding the provisions of paragraph 1, remuneration or income, derived by
a resident of one of the States in respect of an employment, services or activities
exercised or performed in the other State shall be taxable only in the first-mentioned
State if -
-
(a) the recipient is present in the other State for a period or periods not exceeding
in the aggregate 183 days in the calendar year concerned; and
-
(b) the remuneration or income is paid by, or on behalf of, a person who is not a resident
of the other State; and
-
(c) the remuneration or income is not borne by a permanent establishment which that person
has in the other State
Article 16. Directors' fees
Article 17. Artistes and athletes
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1 Notwithstanding the provisions of Article 15, income derived by public entertainers, such as theatre, motion picture, radio or
television artistes, and musicians, and by athletes, from their personal activities
as such may be taxed in the State in which these activities are exercised. This also
applies, notwithstanding the provisions of Article 7, if such income accrues to a person having engaged the public entertainers or athletes.
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1 Subject to the provisions of Article 19, pensions and other similar remuneration paid in consideration of past employment
to a resident of one of the States as well as any annuity paid to such a resident,
shall be taxable only in that State.
Article 19. Governmental functions
-
1 Remuneration, including pensions, paid by, or out of funds created by, one of the
States or a political subdivision or a local authority thereof to any individual in
respect of services rendered to that State or subdivision or local authority thereof
in the discharge of functions of a governmental nature may be taxed in that State.
-
2 However, the provisions of Articles 15, 16 and 18 shall apply to remuneration or pensions in respect of services rendered in connection
with any trade or business carried on by one of the States or a political subdivision
or a local authority thereof.
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1 An individual who immediately before visiting one of the States is a resident of the
other State and is temporarily present in the first-mentioned State for the primary
purpose of -
-
(a) studying at a recognised university, college or school in that first-mentioned State;
or
-
(b) securing trainings as a business apprentice,
shall be exempt from tax in the first-mentioned State in respect of
-
(i) all remittances from abroad or the purpose of his maintenance, education or training;
and
-
(ii) any remuneration for personal services performed in the first-mentioned State in an
amount not in excess of 3,000 Singapore dollars or 3,600 guilders, as the case may
be, for any taxable year.
The benefits under this paragraph shall only extend for such period of time as may
be reasonable or customarily required to effectuate the purpose of the visit.
-
2 An individual who immediately before visiting one of the States is a resident of the
other State and is temporarily present in the first-mentioned State for a period not
exceeding three years for the purpose of study, research or training solely as a recipient
of a grant, allowance or award from a scientific, educational, religious or charitable
organisation or under a technical assistance programme entered into by one of the
States, a political subdivision or a local authority thereof shall be exempt from
tax in the first-mentioned State on -
-
(a) the amount of such grant, allowance or award; and
-
(b) any remuneration for personal services performed in the first-mentioned State provided
such services are in connection with his study, research or training or are incidental
thereto, in an amount not in excess of 3,000 Singapore dollars or 3,600 guilders,
as the case may be, for any taxable year.
-
3 An individual who immediately before visiting one of the States is a resident of the
other State and is temporarily present in the first-mentioned State for a period not
exceeding twelve months as an employee of, or under contract with, the last-mentioned
State, a political subdivision or a local authority thereof, or an enterprise of the
last-mentioned State, for the purpose of acquiring technical, professional or business
experience from a person other than a company 50 per cent or more of the voting stock
of which is owned by the sending State, political subdivision, local authority or
enterprise, shall be exempt from tax in the first-mentioned State on -
-
(a) all remittances from the last-mentioned State for the purpose of his maintenance,
education or training; and
-
(b) any remuneration for personal services performed in the first-mentioned State, provided
such services are in connection with his study or training or are incidental thereto,
in an amount not in excess of 12,500 Singapore dollars or 15,000 guilders, as the
case may be.
Article 21. Income not expressly mentioned
Items of income of a resident of one of the States which are not expressly mentioned
in the foregoing Articles of this Convention shall be taxable only in that State.
Article 23. Personal allowances
Article 24. Elimination of double taxation
-
1 The Netherlands, when imposing tax on its residents, may include in the basis upon
which such taxes are imposed the items of income or capital, which according to the
provisions of this Convention may be taxed in Singapore.
-
2 Without prejudice to the application of the provisions concerning the compensation
of losses in the unilateral regulations for the avoidance of double taxation the Netherlands
shall allow a deduction from the amount of tax computed in conformity with paragraph
1 of this Article equal to such part of that tax which bears the same proportion to
the aforesaid tax, as the part of the income or capital which is included in the basis
mentioned in paragraph 1 of this Article and may be taxed in Singapore according to
Articles 6, 7, 10 (paragraph 6), 11 (paragraph 5), 12 (paragraph 4), 14 (paragraphs 1, 2 and 5), 15 (paragraph 1), 16 (paragraph 1), 17, 19 (paragraph 1) and 22 (paragraphs 1 and 2) of this Convention bears to the total income or capital which forms the basis mentioned
in paragraph 1 of this Article.
-
3 Furthermore the Netherlands shall allow a deduction from Netherlands tax computed
in accordance with the preceding paragraphs of this Article with respect to the items
of income which according to Articles 11 (paragraph 2) and 14 (paragraph 6) of this Convention may be taxed in Singapore and are included in the basis mentioned
in paragraph 1 of this Article. The amount of this deduction shall be equal to the
tax paid in Singapore on these items of income, but shall not exceed the amount of
the Netherlands tax which bears the same relation to the amount of tax computed in
conformity with paragraph 1 of this Article, as the amount of the items of income
mentioned in this paragraph bears to the amount of income which forms the basis mentioned
in paragraph 1.
Article 25. Non-discrimination
-
3 The taxation on a permanent establishment which an enterprise of one of the States
has in the other State shall not be less favourably levied in that other State than
the taxation levied on enterprises of that other State carrying on the same activities.
This provision shall not be construed as obliging one of the States to grant to residents
of the other State any personal allowances, reliefs and reductions for taxation purposes
on account of civil status or family responsibilities which it grants to its own residents.
-
4 Enterprises of one of the States, the capita! of which is wholly or partly owned or
controlled, directly or indirectly, by one or more residents of the other State, shall
not be subjected in the first-mentioned State to any taxation or any requirement connected
therewith which is other or more burdensome than the taxation and connected requirements
to which other similar enterprises of that first-mentioned State are or may be subjected.
Article 26. Mutual agreement procedure
-
1 Where a resident of one of the States considers that the actions of one or both of
the States result or will result for him in taxation not in accordance with this Convention,
he may, notwithstanding the remedies provided by the national laws of those States,
present his case to the competent authority of the State of which he is a resident.
-
2 The competent authority shall endeavour, if the objection appears to it to be justified
and if it is not itself able to arrive at an appropriate solution, to resolve the
case by mutual agreement with the competent authority of the other State, with a view
to the avoidance of taxation not in accordance with this Convention.
Article 27. Exchange of information
-
1 The competent authorities of the States shall exchange such information as is foreseeably
relevant for carrying out the provisions of this Convention or to the administration
or enforcement of the domestic laws concerning taxes of every kind and description
imposed on behalf of the States, or of their political subdivisions or local authorities,
insofar as the taxation thereunder is not contrary to the Convention. The exchange
of information is not restricted by Articles 1 and 2.
-
2 Any information received under paragraph 1 by a State shall be treated as secret in
the same manner as information obtained under the domestic laws of that State and
shall be disclosed only to persons or authorities (including courts and administrative
bodies) concerned with the assessment or collection of, the enforcement or prosecution
in respect of, the determination of appeals in relation to the taxes referred to in
paragraph 1, or the oversight of the above. Such persons or authorities shall use
the information only for such purposes. They may disclose the information in public
court proceedings or in judicial decisions.
-
4 If information is requested by a State in accordance with this Article, the other
State shall use its information gathering measures to obtain the requested information,
even though that other State may not need such information for its own tax purposes.
The obligation contained in the preceding sentence is subject to the limitations of
paragraph 3 but in no case shall such limitations be construed to permit a State to
decline to supply information solely because it has no domestic interest in such information.
-
5 In no case shall the provisions of paragraph 3 be construed to permit a State to decline
to supply information solely because the information is held by a bank, other financial
institution, nominee or person acting in an agency or a fiduciary capacity or because
it relates to ownership interests in a person.
Article 28. Territorial extension
-
1 This Convention may be extended, either in its entirety or with any necessary modifications,
to either or both of the countries of Surinam or the Netherlands Antilles, if the
country concerned imposes taxes substantially similar in character to those to which
this Convention applies. Any such extension shall take effect from such date and subject
to such modifications and conditions, including conditions as to termination, as may
be specified and agreed in notes to be exchanged through diplomatic channels.
Article 29. Entry into force
This Convention shall come into force on the date on which the respective Governments
have notified each other in writing that in their respective States the last of all
such things have been done as are necessary to give this Convention title force of
law, and shall thereupon have effect -
-
(a) in the case of the Netherlands:
for taxable years and periods beginning on or after the first day of January 1968;
-
(b) in the case of Singapore:
for years of assessment beginning on or after the first day of January 1969.
This Convention shall continue in force indefinitely but either State may, on or before
the 30th day of June in any calendar year not earlier than the year 1973, give to
the other State, through diplomatic channels, written notice of termination and, in
such event, this Convention shall cease to be effective
-
(a) in the case of the Netherlands:
for taxable years and periods beginning after the end of the calendar year in which
the notice is given;
-
(b) in the case of Singapore:
for years of assessment beginning on or after the first day of January in the second
calendar year following that in which such notice is given.