Tax Treaty Classification of Netherlands-Source Income from Lucrative Interests (Carried Interest)

This article discusses the tax treaty classification of Netherlands-source carried interest (income from lucrative interests) earned by non-resident taxpayers. The Netherlands legislator has created a specific regime to tax this type of remuneration in order to discourage the granting of such benefits. However, the article establishes that the effectiveness of this regime may be restricted by Netherlands tax treaties and the Netherlands tax liability of non-residents.