CONVENTION BETWEEN THE UNITED STATES OF AMERICA AND THE KINGDOM OF
THE NETHERLANDS FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE
PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON ESTATES AND
The Government of the United States of America and the Government
of the Kingdom of the Netherlands, desiring to conclude a convention for
the avoidance of double taxation and the prevention of fiscal evasion
with respect to taxes on estates and inheritances, have appointed for
that purpose as their respective Plenipotentiaries:
The Government of the United States of America: William P. Rogers,
Secretary of State, and
The Government of the Kingdom of the Netherlands: Hendrik C.
Maclaine Pont, Minister of the Kingdom of the Netherlands, who, having
communicated to each other their full powers, found in good and due
form, have agreed upon the following articles:
SCOPE OF THE CONVENTION
This Convention shall apply to estates of decedents which are
subject to the taxing jurisdiction of one or both States by reason of
the decedent's domicile therein or citizenship thereof at death. A
decedent who at death was a citizen of the United States but is
considered under the laws of the United States as having been a
nonresident not a citizen of the United States for purposes of its tax
shall be considered as having been neither domiciled in nor a citizen of
the United States for purposes of this Convention.
(1) The taxes to which this Convention shall apply are:
(a) In the case of the United States: The Federal estate tax; and
(b) In the case of the Netherlands: The succession duty and the
transfer duty at death.
(2) This Convention shall also apply to any taxes on estates and
inheritances imposed by the States on the occasion of death, which are
subsequently enacted in addition to, or in place of, the existing taxes,
in the form of (a) tax on the corpus of the estate, (b) tax on
inheritances, (c) transfer duties, or (d) taxes on donations mortis
(3) The competent authorities of the States shall notify each other
of any substantial changes which have been made in their respective laws
relating to taxes on estates and inheritances.
(1) In this Convention:
(a) The terms "State" and "other State" mean the
United States or
the Netherlands, as the context requires;
(b) The term "United States" means the United States of America
when used in a geographical sense means the States thereof and the
District of Columbia;
(c) The term "the Netherlands" comprises the part of the Kingdom
the Netherlands that is situated in Europe;
(d) The term " tax" means the tax or taxes described in Article
which are imposed by the State (or States) indicated by the context of
the term's usage;
(e) The term "credit" means a deduction from tax; and
(f) The term "competent authority" means:
(i) In the case of the United States, the Secretary of the Treasury
or his delegate, and
(ii) In the case of the Netherlands, the Minister of Finance or his
duly authorized representative.
(2) Any term not otherwise defined in this Convention shall, unless
the context otherwise requires, have the meaning which it has under the
laws of the State whose tax is being determined.
(1) For the purposes of this Convention, the question whether a
decedent was domiciled in one of the States at his death shall be
determined according to the law of that State.
(2) A decedent who at his death was a citizen of one of the States
without being a citizen of the other State, and who would be considered,
under paragraph (1), as having been domiciled in both States at his
death, shall be deemed to have been domiciled in (and only in) the State
of which he was a citizen, if:
(a) He died when having been domiciled in the other State in the
aggregate less than 7 years during the 10-year period ending at his
(b) He was in the other State for business, professional,
educational, training, tourism, or a similar purpose (or in his capacity
as the spouse or a dependent member of the family of a person who was in
that other State for such a purpose), and did not have a clear intention
to remain indefinitely in the other State.
(3) Where by reason of the provisions of paragraph (1) a decedent
other than a decedent described in paragraph (2), was domiciled in both
States, then this case shall be determined in accordance with the
(a) He shall be deemed to have been domiciled in the State in which
he made his permanent home for 5 years or more immediately preceding his
(b) If he did not make his permanent home for 5 years or more in
either State, his domicile shall be deemed to be in the State with which
his personal relations were closest;
(c) If the State in which his personal relations were closest
cannot be determined, his domicile shall be deemed to be in the State of
which he was a citizen; or
(d) If he was a citizen of both States or of neither of them, the
competent authorities of the States shall determine the State of his
domicile by mutual agreement.
(4) For purposes of paragraph (2), unless all of the evidence
considered together is clear and convincing to the contrary it shall be
presumed that the decedent did not have a clear intention to remain
indefinitely in the State of which he was not a citizen.
APPLICATION OF DOMESTIC LAWS
(1) Except as otherwise provided in this Convention, each State
shall impose its tax, and shall allow exemptions, deductions, credits,
and other allowances, in accordance with its laws.
(2) In any case in which the laws of a State allocate deductions on
the basis of the situs of property, property shall be deemed for the
purpose of determining the amounts of any deductions to have a situs in
that State only if that State may tax it under this Convention, and
property shall be deemed for the purpose of determining the amounts of
any credits to have a situs in the other State only if a credit is
allowable under Article 11 for the tax of that other State with respect
to the property. However, for purposes of (and only for purposes of)(a)
the requirements of the respective tax laws of the States relating to
information or tax returns or notices, transfer certificates, or
maintenance of records, and (b) determining the applicability and amount
of any sanctions of such laws with respect to the requirements referred
to in (a) above, neither this paragraph nor any provision of Article 6,
7, or 8 shall change the taxability or situs of property or the amount
of tax which would otherwise have been due in the absence of this
Convention (or the amount of any resulting underpayment of tax).
Notwithstanding the preceding sentence, requirements or sanctions found
to be unnecessary for the prevention of fraud or fiscal evasion with
respect to tax may be eliminated or modified (but not made more
burdensome) by regulations prescribed pursuant to paragraph (5) of
(3) The provisions of this Convention shall not result in an
increase in the amount of the tax imposed by either State (except to the
extent that the increase results from a reduction under the provisions
of this Convention of the tax paid to a State with respect to which
credit is allowable).
(1) Immovable property may be taxed by a State if such property is
situated in that State.
(2) Whether any property constitutes immovable property shall be
determined in accordance with the laws of the State in which such
property is located. However, the term "immovable property" shall in any
case include real property (but not mortgages, bonds, or other security
interests or ships, boats, or aircraft).
(3) The provisions of paragraphs (1) and (2) shall apply to
immovable property whether or not such property forms part of the
business property of a permanent establishment or is used for the
performance of professional services or other independent activities of
a similar character.
(4) The provisions of this article shall not cause property which
is not taxable by a State under its laws to be taxed (or taken into
account in determining the rate of tax) by that State.
BUSINESS PROPERTY OF A PERMANENT ESTABLISHMENT AND ASSETS
PERTAINING TO A FIXED BASE USED FOR THE PERFORMANCE OF PROFESSIONAL
(1) Except as provided in Article 6, assets (other than ships and
aircraft operated in international traffic and movable property
pertaining to the operation of such ships and aircraft) forming part of
the business property of a permanent establishment may be taxed by a
State if the permanent establishment is situated in that State.
(2) For purposes of this Convention, the term "permanent
establishment" means a fixed place of business through which a decedent
was engaged in trade or business. A decedent shall be deemed to have
been engaged in trade or business through a fixed place of business
whether he is so engaged as a sole proprietor or through a partnership
or other unincorporated association, but in the case of a partnership or
association, only to the extent of his interest therein. References in
this article to a "decedent" shall be deemed to include such interests.
(3) The term "fixed place of business" shall include especially:
(a) A branch;
(b) An office;
(c) A factory;
(d) A workshop;
(e) A sales outlet;
(f) A mine, quarry, or other place of extraction of natural
(g) A building site or a construction or assembly project which
exists for more than 12 months.
(4) Notwithstanding paragraphs (2) and (3), a permanent
establishment shall not include a fixed place of business used solely
for one or more of the following activities:
(a) The use of facilities for the purpose of storage, display, or
delivery of goods or merchandise belonging to the decedent;
(b) The maintenance of a stock of goods or merchandise belonging to
the decedent for the purpose of storage, display, or delivery;
(c) The maintenance of a stock of goods or merchandise belonging to
the decedent for the purpose of processing by another;
(d) The maintenance of a fixed place of business for the purpose of
purchasing goods or merchandise, or for collecting information, for the
(e) The maintenance of a fixed place of business for the purpose of
advertising, for the supply of information, for scientific research, or
for similar activities if they have a preparatory or auxiliary
character, for the decedent;
(f) The maintenance of a fixed place of business (by a person other
than a dealer) for the purpose of investing or trading in stocks,
securities, or commodities for the decedent's own account, whether
directly or through a broker or other agent.
(5) A person who was acting in a State on behalf of a decedent--
other than an agent to whom paragraph (4)(f) or (6) applies--shall be
deemed to have a permanent establishment of the decedent in that State
if such person had, and habitually exercised in that State, an authority
to conclude contracts in the name of the decedent, unless the exercise
of such authority was limited to the purchase of goods or merchandise
for the decedent.
(6) A decedent shall not be deemed to have had a permanent
establishment in a State merely because he carried on a trade or
business in that State through a broker, general commission agent, or
any other agent of an independent status acting in the ordinary course
of his business.
(7) The fact that the decedent controlled a corporation which
engaged in trade or business in a State (whether through a permanent
establishment or otherwise) shall not be taken into account in
determining whether the decedent had a permanent establishment in such
(8) Except as provided in Article 6, assets pertaining to a fixed
base used for the performance of professional services or other
independent activities of a similar character may be taxed by a State if
the fixed base is situated in that State.
(9) The provisions of this article shall not cause property which
is not taxable by a State under its laws to be taxed (or taken into
account in determining the rate of tax) by that State.
TAXATION ON THE BASIS OF DOMICILE
Subject to the provisions of Article 9, and except as provided in
Article 6 or 7, property may be taxed (or taken into account in
determining the rate of tax) only by the State in which the decedent was
domiciled at his death.
TAXATION ON THE BASIS OF CITIZENSHIP
If the decedent was a citizen of a State at his death that State
may tax property in accordance with its laws, including property not
enumerated in Article 6 or 7, whether or not he was domiciled therein.
(1) Property (other than community property) which passes to the
surviving spouse from a decedent who was a domiciliary or citizen of the
United States, and which may be taxed by the Netherlands solely by
reason of Article 6 or 7, shall, for the purpose of determining the
Netherlands transfer duty at death, be included in the estate only to
the extent its value exceeds 50 percent of the value of all property
included in the estate which may be taxed by the Netherlands. For
purposes of this paragraph, the value of the estate which may be taxed
by the Netherlands, and of the property which passes to the surviving
spouse, shall be determined after taking into account any applicable
deductions but before applying paragraph (2).
(2) Where a State may tax solely by reason of Article 6 or 7, that
State shall not impose any tax if the aggregate value of the property
included in the estate subject to its tax (after taking into account any
applicable deductions and after taking into account the provisions of
paragraph (1), but before taking into account any other exemptions) does
not exceed $30,000. If the value so determined exceeds $30,000, the tax
imposed shall not exceed the lesser of (a) 50 percent of such value in
excess of $30,000, or (b) the amount of the tax determined in accordance
with the provisions of this Convention taking into account any
exemptions allowable under the laws of the State.
(3) Paragraph (1) shall be inapplicable during such period as the
laws of the United States make the tax imposed by it with respect to
estates of nonresident aliens substantially less favorable in relation
to the tax imposed by it with respect to estates of its citizens or
domiciliaries than is the case when this Convention is signed.
RELIEF FROM DOUBLE TAXATION
(1) Where both States impose tax with respect to property which may
be taxed by a State in accordance with Article 6 or 7, a State which
imposes its tax on the basis of the decedent's domicile therein or
citizenship thereof at death shall allow a credit equal to the amount of
the tax imposed by the other State with respect to property which may be
taxed by such other State in accordance with Article 6 or 7.
(2) In addition to any credit allowable under paragraph (1), where
both States impose tax with respect to property which is not property
which one of the States may tax in accordance with Article 6 or 7:
(a) If the decedent was a citizen of only one State at death and if
at his death he had been domiciled in the other State in the aggregate 7
or more years during the 10-year period ending at his death, then the
State of which he was a citizen shall allow a credit equal to the amount
of the tax imposed by such other State;
(b) If the decedent was a citizen of both States and a domiciliary
of one State at death, then the State of which he was not a
[domiciliary] shall allow a credit equal to the amount of the tax
imposed by the other State; or
(c) If neither subparagraph (a) nor subparagraph (b) is applicable,
then each State shall allow a credit in the amount which bears the same
proportion to the amount of its tax attributable to such property, or to
the amount of the other State's tax attributable to the same property,
whichever is less, as the former amount bears to the sum of both
(3) Notwithstanding the provisions of paragraphs (1) and (2), the
total amount of all credits allowed by a State pursuant to this article
or pursuant to the laws or other conventions of such State with respect
to all property in respect of which a credit is allowable under
paragraph (1) or (2)(a) or (b) shall not exceed that part of the tax of
the crediting State which is attributable to such property.
(4) In determining the amount of the tax imposed by a State with
respect to or attributable to property there shall be subtracted from
the gross tax so imposed all credits allowed by such State with respect
to such property except credits which are allowable under this article.
(5) As used in paragraphs (1) and (2) of this article, reference to
property which may be taxed by a State in accordance with Article 6 or 7
includes property which would be taxable by a State under the terms of
one of those articles if taxable by the State under its laws, whether or
not it is also taxable on the basis of the decedent's domicile or
citizenship at death.
(6) No credit shall be finally allowed under this article until the
tax for which the credit is allowable (reduced by any credit allowable
with respect thereto) has been paid.
(7) Any credits authorized by this article are in lieu of, and not
in addition to, any credits authorized by the respective laws of the
States for the taxes of the other State.
LIMITATION ON CLAIMS FOR CREDIT OR REFUND
(1) Any claim for credit or for refund of tax founded on the
provisions of this Convention shall be made before the expiration of the
(a) The time for the making of a claim for refund of tax under the
laws of the State to which the claim for credit or refund is made;
(b) Five years from the date of death of the decedent in respect of
whose estate the claim is made; or
(c) One year after final determination and payment of tax for which
any credit under Article 11 is claimed, provided that the determination
and payment are made within 10 years of the date of death of the
(2) Any refund based on the provisions of this Convention shall be
made without payment of interest on the amount so refunded.
(1) Any person who 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 may, notwithstanding the remedies provided by the laws
of those States, present his case to the competent authority of either
State. Such presentation must be made within the period of time
prescribed for the filing of a claim for credit or refund under Article
12. Should the person's claim be considered to have merit by the
competent authority of the State to which the claim is made, it shall
endeavor to come to an agreement with the competent authority of the
other State with a view to the avoidance of taxation contrary to the
provisions of this Convention.
(2) The competent authorities of the States shall endeavor to
resolve by mutual agreement any difficulties or doubts arising as to the
interpretation or application of this Convention.
(3) The competent authorities of the States may communicate with
each other directly for the purpose of reaching an agreement in the
sense of this article. When it seems advisable for the purpose of
reaching an agreement, the competent authorities may meet together for
an oral exchange of opinions.
(4) In the event that the competent authorities reach such an
agreement, taxes shall be imposed, and refund or credit of taxes shall
be allowed, by the States in accordance with such agreement.
(5) The competent authority of each State may prescribe such
regulations and forms as may be necessary or appropriate to give effect
to and implement the provisions of this Convention.
EXCHANGE OF INFORMATION
(1) The competent authority of each State shall furnish the
competent authority of the other State such information as is pertinent
to (a) carrying out the provisions of this Convention or the laws of
such other State concerning its tax insofar as the taxation thereunder
is in accordance with this Convention, or (b) preventing fraud or fiscal
evasion in relation to the taxes which are the subject of this
Convention (including information with respect to property exempted from
the tax of the first-mentioned State by reason of Article 8). However,
this paragraph shall not require the competent authority of a State to
furnish information not in the possession of that State with respect to
property exempted from its tax by reason of Article 8. Any information
furnished shall be treated as secret and shall not be disclosed to any
persons other than those (including a court or administrative body)
concerned with assessment, collection, enforcement, or prosecution in
respect of the taxes which are the subject of this Convention.
(2) In no case shall the provisions of paragraph (1) be construed
so as to impose on one of the States the obligation:
(a) To carry out administrative measures at variance with the laws
or the administrative practice of that or of the other State;
(b) To supply particulars which are not obtainable under the laws
or in the normal course of the administration of that or of the other
(c) To supply information which would disclose any trade, business,
industrial, commercial, or professional secret or trade process, or
information the disclosure of which would be contrary to public policy.
(3) The furnishing of information shall be either on a routine
basis or on request with reference to particular cases. The competent
authorities of the States shall agree on the list of information which
shall be furnished on a routine basis.
DIPLOMATIC AND CONSULAR OFFICIALS
(1) Nothing in this Convention shall affect the fiscal privileges
of diplomatic or consular officials or officials of international
organizations under the general rules of international law or under the
provisions of special agreements.
(2) Insofar as such privileges prevent the imposition of tax in the
receiving State, the right to tax shall be reserved to the country in
whose service the persons concerned exercised their functions or in the
case of international officials the country of citizenship, and not
withstanding any other provisions of this Convention such persons shall
not be deemed to be domiciled in the receiving State.
ENTRY INTO FORCE
(1) This Convention shall be ratified and the instruments of
ratification shall be exchanged at The Hague as soon as possible.
(2) This Convention shall enter into force on the date on which the
instruments of ratification are exchanged and its provisions shall apply
to estates of persons dying on or after that date.
(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 and to all or any of the areas for
whose international relations the United States is responsible, if the
country or area 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 an exchange of notes through diplomatic channels. Such
notes shall be ratified and the instruments of ratification exchanged.
(2) Unless otherwise specified in the notice of termination
referred to in Article 18 the termination of this Convention shall not
also terminate the application of this Convention to any country or area
to which it has been extended under this article.
This Convention shall remain in force until terminated by one of
the States. Either State may terminate this Convention, through
diplomatic channels, with effect from the end of any calendar year not
earlier than 5 years after the effective date of this Convention by
giving at least 6 months notice in writing of termination. In such an
event, this Convention will not apply to estates of persons dying after
the expiration of the calendar year with respect to the end of which
this Convention has been terminated.
IN WITNESS WHEREOF the undersigned, duly authorized thereto, have
signed this Protocol.
DONE in duplicate, in the English and Dutch languages, both texts
being equally authentic, at Washington this 15th day of July, 1969.
FOR THE GOVERNMENT OF THE
UNITED STATES OF AMERICA:
WILLIAM P. ROGERS
FOR THE GOVERNMENT OF THE
KINGDOM OF THE NETHERLANDS:
HENDRIK C. MACLAINE PONT