Aruba – USA Protocol to the 1948 Treaty (1963)

PROTOCOL TO THE 1948 TREATY (1963)

Date of Conclusion: 23 October 1963.

Entry into Force: In force.

Effective Date: Effective.

Termination Date: 1 January 1988.

[PROTOCOL TO THE CONVENTION]

Article I

  1. Articles VII, VIII, and IX of the Convention shall not apply to income derived from sources within the United States by any investment or holding company, corporation, limited partnership or other entity entitled to any of the special tax benefits provided under Article 13, Article 14, or Article 14A of the Netherlands Antilles’ National Ordinance on Profit Tax of 1940, as in effect on September 1, 1963, or to substantially similar tax benefits granted under any law of the Netherlands Antilles enacted after such date.

  2. Notwithstanding the provisions of paragraph (1) of the present Article, Articles VII, VIII and IX of the Convention shall continue to apply to dividends, interest, and royalties derived by any entity, to which the provisions of paragraph (1) of this Article would otherwise apply, if either

(a) the payer of such income is a United States corporation (other than a United States corporation, 60 percent or more of the gross income of which is derived from interest except to the extent derived by a corporation the principal business of which is the making of loans, dividends, royalties, rents from real property, or gain from the sale or other disposition of stock, securities, or real property), 25 percent or more of the stock of which is owned by such entity; or

(b) all of the stock of such entity is owned

(i) solely by one or more individual residents of the Netherlands Antilles in their individual capacities,

(ii) solely by one or more individual residents of the Netherlands in their individual capacities, or

(iii) solely by one or more corporations of the Netherlands.

Article II

[incorporated]

Article III

  1. The present Protocol shall be ratified and the instruments of ratification shall be exchanged at Washington as soon as possible.
  2. The present Protocol shall come into force on the date of exchange of instruments of ratification.

  3. Article I of the present Protocol shall be applicable with respect to payments made on or after the first day of January of the year immediately following the year in which the exchange of instruments of ratification takes place. Article II of the present Protocol shall be applicable with respect to elections made for taxable years beginning on or after the first day of January of the year immediately following the year in which the exchange of instruments of ratification takes place.

  4. Notwithstanding the provisions of paragraph (3) of this Article, the following provisions shall apply with respect to dividends and interest paid to a corporation or other entity which is organized in the Netherlands Antilles under a notarial deed of incorporation dated on or before May 14, 1963, if Articles VII and VIII of the Convention would not be applicable to such dividends and interest by reason of Article I of the Present Protocol:

(a) In the case of a dividend

(i) paid during the period of two years beginning on the first day of January, 1964, the provisions of Article VII of the Convention shall continue to apply as though the present Protocol had not yet come into force;

(ii) paid during the year beginning on the first day of January, 1966, United States tax with respect to such dividend shall be imposed at a rate not exceeding 20 percent; and

(b) In the case of interest paid during the period of three years beginning on the first day of January, 1964, the provisions of Article VIII shall continue to apply as though the present Protocol had not yet come into force.

IN WITNESS WHEREOF the undersigned representatives, duly authorised for that purpose, have signed the present Protocol.

DONE in duplicate, in the English and Dutch languages, the two texts having equal authenticity, at The Hague, this 23rd day of October, 1963.