Globe-Trotting Sportsman Or Entertainer: Netherlands

A Dutch citizen with extensive, international, multi-sourced income is not in a good tax situation unless he or she can establish non-residence, since full, world-wide taxation of income will apply.

If resident in the Netherlands, the peripatetic professional may well find himself paying withholding tax in a number of countries which cannot in some cases be reclaimed or set off against Dutch taxation because of the absence of a tax treaty; there is a unilateral tax-credit given on foreign income but it applies only in 'high-tax' countries.

Such an individual will almost certainly resort to corporate structures to market his or her skills and manage derivative income flows. It may well be that these can usefully be based in offshore jurisdictions, although complex structures may be necessary if corporate anti-avoidance rules are to be avoided.

Apart from the extra difficulty of minimising tax on the income side, a Dutch-resident sportsman or entertainer will be in the same position as any other Dutch resident. (Select 'High-Tax Country Resident' and 'Netherlands' for a fuller description).

If a foreign sportsman or entertainer becomes Dutch resident, then he or she is in the same position as an expatriate executive (select 'Expatriate Executive' and 'France'). It is possible that a foreign resident will be able to take advantage of the '35% ruling (although this rate has since been reduced to 30%).

'The 35% ruling applies to foreign nationals assigned to work in the Netherlands for a company which operates the Dutch withholding tax scheme on its payroll. This can be a Dutch subsidiary of a foreign company. The ruling also applies to Dutch nationals if they have been absent (non-resident) for a period of at least 8 years before returning to work in the Netherlands. In order to qualify under the ruling, an employee must have skills which are not easily found in the Netherlands; by and large, senior employees find it easier to fall under the ruling than do junior employees. Under the ruling, which can apply to one individual for up to 10 years, a substantial part of a person's Dutch earned income is tax-free.

Individuals benefitting from the 35% ruling may also apply to be treated as non-resident for Dutch tax purposes. This would be highly beneficial for a foreign entertainer or sportsman with significant international assets; but it might not be that easy to get the 35% ruling in the first place.

Dutch-resident entertainers and sportsmen who have significant business income may be able to make use of offshore corporate tax shelters in order to minimise Dutch taxation.

www.lowtax.net contains details of the corporate and partnership legal structures available in the 35 most prominent offshore jurisdictions, including the Netherlands Antilles and Aruba, which offer especially suitable regimes for Dutch companies. www.lowtax.net has descriptions of the most important business sectors in each jurisdiction, local tax regimes, and the international treaties entered into by each jurisdiction.

NB: The suggestions given above do not constitute investment advice. They are intended only to assist individuals in finding appropriate professional advice, which is essential for anyone planning offshore investment.