Place of residence: Curaçao company subject to Dutch corporate income tax
X BV is an investment company (i.e. a cashbox). Until late 2001, the investment company resided in the Netherlands and then the shareholder, who lived in the Netherlands, moved the seat of the investment company to Curaçao and appointed a trust company as board of the investment company.
The facts show that the Dutch shareholder negotiated the asset management agreement with a private bank and that the trust company needed approval of the shareholder for all most everything that had to do with the asset management.
At stake was where the actual management and control of the investment company was: in the Netherlands and Curaçao.
The court finds that the investment company was actually managed and controlled by its sole shareholder, who lived in the Netherlands and thus that the investment company was subject to Dutch corporate income tax.
In the international tax treaties, the basic rule is that in general the actual management and control of a company rests with its board and that the place of residence corresponds with the place where the board performs its duties. However, in case the actual management and control is exercised by someone else residing in another country, the place of residence can be located in that other country. Or simply put: if you want your company to be managed by a trust company, you have to give that trust company the powers to actually manage your company.