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CHAPTER I - Scope of the Arrangement
CHAPTER II - Definitions
CHAPTER III - Taxation of Income
CHAPTER IV - Avoidance of Double Taxation
CHAPTER V - Special Provisions
CHAPTER VI - Final Provisions
Note: This Treaty may be impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI impact on Tax Treaties is available with the Orbitax International Tax Research & Compliance Expert.

ARTICLE 21

Avoidance 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 which, according to the provisions of this Arrangement, may be taxed in St. Maarten.

(2) Where a resident of the Netherlands derives items of income which according to paragraphs (1), (3), (4) and (5) of Article 6, paragraph (1) of Article 7, paragraph (12) of Article 10, paragraph (3) of Article 11, paragraph (3) of Article 12, paragraphs (1), (2) and (3) of Article 13, paragraph (1) of Article 14, paragraph (2) of Article 17, paragraphs (1) and (3) of Article 18 and paragraph (2) of Article 20 may be taxed in St. Maarten and are included in the basis referred to in paragraph (1), the Netherlands shall exempt such items of income by allowing a reduction of its tax. This reduction shall be computed in conformity with the provisions of the Netherlands law for the avoidance of double taxation. For that purpose the said items of income shall be deemed to be included in the amount of the items of income which are exempt from Netherlands tax under those provisions.

(3) Further, the Netherlands shall allow a reduction from the Netherlands tax so computed for the items of income which according to paragraphs (2) and (14) of Article 10, Article 15, paragraphs (1) and (2) of Article 16 and paragraph (3) of Article 17 may be taxed in St. Maarten to the extent that these items are included in the basis referred to in paragraph (1). The amount of this reduction shall be equal to the tax paid in St. Maarten on these items of income, but shall, in case the provisions of the Netherlands law for the avoidance of double taxation provide so, not exceed the amount of the reduction which would be allowed if the items of income so included were the sole items of income for which the Netherlands gives a reduction under the provisions of the Netherlands law for the avoidance of double taxation. This paragraph shall not restrict allowance now or hereafter accorded by the provisions of the Netherlands law for the avoidance of double taxation, but only as far as the calculation of the amount of the reduction of Netherlands tax is concerned with respect to the aggregation of income from more than one country and the carry-forward of the tax paid in St. Maarten on the said items of income to subsequent years.

(4) Notwithstanding the provisions of paragraph (2), the Netherlands shall allow a reduction from the Netherlands tax for the tax paid in St. Maarten on items of income which according to paragraph (1) of Article 7, paragraph (12) of Article 10, paragraph (3) of Article 11, paragraph (3) of Article 12 and paragraph (2) of Article 20 may be taxed in St. Maarten to the extent that these items are included in the basis referred to in paragraph (1), insofar as the Netherlands under the provisions of the Netherlands law for the avoidance of double taxation allows a reduction from the Netherlands tax of the tax levied in a third country on such items of income. For the computation of this reduction the provisions of paragraph (3) shall apply accordingly.

(5) St. Maarten, when imposing tax on its residents, may include in the basis upon which such taxes are imposed the items of income which, according to the provisions of this Arrangement, may be taxed in the Netherlands.

(6) Where a resident of St. Maarten derives items of income which according to paragraphs (1), (3), (4) and (5) of Article 6, paragraph (1) of Article 7, paragraph (12) of Article 10, paragraph (3) of Article 11, paragraph (3) of Article 12, paragraphs (1), (2) and (3) of Article 13, paragraph (1) of Article 14, paragraph (2) of Article 17, paragraphs (1) and (3) of Article 18 and paragraph (2) of Article 20 may be taxed in the Netherlands and are included in the basis referred to in paragraph (5), St. Maarten shall exempt such items of income by allowing a reduction of its tax. This reduction shall be computed in conformity with the provisions of the St. Maarten law for the avoidance of double taxation. For that purpose the said items of income shall be deemed to be included in the amount of the items of income which are exempt from St. Maarten tax under those provisions.

(7) Further, St. Maarten shall allow a reduction from the St. Maarten tax so computed for the items of income which according to paragraphs (2) and (14) of Article 10, Article 15, paragraphs (1) and (2) of Article 16 and paragraph (3) of Article 17 may be taxed in the Netherlands to the extent that these items are included in the basis referred to in paragraph (5). The amount of this reduction shall be equal to the tax paid in the Netherlands on these items of income, but shall, in case the provisions of the St. Maarten law for the avoidance of double taxation provide so, not exceed the amount of the reduction which would be allowed if the items of income so included were the sole items for which St. Maarten gives a reduction under the provisions of the St. Maarten law for the avoidance of double taxation. This paragraph shall not restrict allowance now or hereafter accorded by the provisions of the St. Maarten law for the avoidance of double taxation, but only as far as the calculation of the amount of the reduction of St. Maarten tax is concerned with respect to the aggregation of income from more than one country and the carry-forward of the tax paid in the Netherlands on the said items of income to subsequent years.

(8) Notwithstanding the provisions of paragraph (6), St. Maarten shall allow a reduction from the St. Maarten tax for the tax paid in the Netherlands on items of income which according to paragraph (1) of Article 7, paragraph (12) of Article 10, paragraph (3) of Article 11, paragraph (3) of Article 12 and paragraph (2) of Article 20 may be taxed in the Netherlands to the extent that these items are included in the basis referred to in paragraph (6), insofar as St. Maarten under the provisions of the St. Maarten law for the avoidance of double taxation allows a reduction from the Netherlands tax of the tax levied in a third country or a state on such items of income. For the computation of this reduction the provisions of paragraph (7) shall apply accordingly.

(9) Notwithstanding the provisions of paragraph (6), in the case of a permanent establishment of an enterprise of St. Maarten which is situated in the Caribbean part of the Netherlands and which, if it had been a Netherlands company and deemed to be situated in the European part of the Netherlands under Article 5.2 of the Caribbean Income Tax Act (Belastingwet BES), there shall be allowed, in respect of the items of income attributable thereto that may be taxed therein according to Article 7 and are included in the basis referred to in paragraph (5), in conformity with paragraph (8), a reduction from the St. Maarten tax for the tax paid in accordance with the tax laws applicable in the Caribbean part of the Netherlands.

(10) The Netherlands shall, in accordance with the provisions of paragraphs (2) and (3) of Article 14 of Directive 2003/48/EC, ensure that the imposition of the withholding tax referred to in Article 33 does not lead to double taxation, or shall provide a refund of the withholding tax.