According to recent reports, on 18 August 2014, a protocol to the 2012 income tax treaty between Ethiopia and the Netherlands was signed. The 2012 treaty is not yet in force.
The protocol clarifies the taxation of dividends (Article 10), and adds limitation on benefits provisions (Article 21A). Under the limitation on benefits provisions, residents of either Contracting State will only be eligible for the reduced withholding tax rates provided by the articles on dividends, interest, and royalties when they are resident "qualified persons". Qualified persons include:
If the benefits would be denied, the competent authority of the Contracting State denying the benefits should consult with the competent authority of the other State before doing so.
The protocol will enter into force after the ratification instruments are exchanged and will apply from the date the 2012 income tax treaty applies. In the Netherlands, the treaty will apply 1 January of the year following the treaty's entry into force, and in Ethiopia, the treaty will apply 8 July following the treaty's entry into force.
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