NETHERLANDS Law and Practice Contributed by: Rik van Waasbergen, Sander Metzelaar, Wiebe Wajer, Iris Stielstra and Daan Komen, HerikLegal
8. Ship-Owners’ Income Tax Relief 8.1 Exemptions or Tax Reliefs on the Income of Ship-Owners’ Companies The Dutch fiscal system has an elective profit deter - mination system for owners’ companies called the tonnage tax (the “tonnage regime”). Instead of being taxed on the actual commercial profit, owners can opt to be taxed a lump sum based on the net tonnage of the ships operated by them and the number of oper - ating days. The statutory basis is found in Articles 3.22–3.24 of Wet inkomstenbelasting 2001 (“Wet IB 2001”). For many owners of vessels and fleets, this option results in a lower tax rate compared to both regular Dutch profit taxes and even some open-reg - ister states. The owner must request application of this elective regime in the first year in which it generates profits from the operation or exploitation of ships intended for (among other things) international sea transport of goods or passengers. Once granted, the regime applies for a ten-year period before it must be renewed. 9. Implications of Non-Performance, IMO 2020, Trade Sanctions and International Conflict 9.1 Force Majeure and Frustration Under Dutch law, non-performance of a shipping con - tract (eg, late delivery, non-arrival of a chartered ves - sel or slow loading/discharging) is assessed primar - ily under the doctrines of force majeure ( overmacht ), based on Article 6:75 of the DCC, and unforeseen circumstances ( onvoorziene omstandigheden ), based on Article 6:258 of the DCC. The common law concept of “frustration” does not exist as such in the Nether - lands. Non-performance qualifies as force majeure if it is not attributable to the debtor because it is not due to fault, or because it is not the debtor’s responsibility under law, legal act (contract) or generally accepted standards. This is a strict test. Force majeure may only be accepted in exceptional circumstances. Increased costs, longer voyage times (eg, rerouting), congestion
at ports or shortages of crew, containers or capacity will generally not qualify as force majeure. The doctrine of unforeseen circumstances is the clos - est Dutch equivalent to “frustration”, but it does not automatically terminate the contract. Courts apply this doctrine very sparingly, especially in commercial shipping contracts. It may be considered where the contractual equilibrium is fundamentally disrupted, the risk clearly falls outside normal commercial risk allocation, or the event was genuinely unforeseeable at the time of contracting. Mere delay, increased costs or market disruption will rarely suffice. 9.2 Enforcement of the IMO 2020 Rule Limiting the Sulphur Content of Fuel Oil IMO 2020 limits the sulphur in fuel oil used on board ships operating outside designated emission control areas to 0.50% m/m (mass by mass). IMO 2020 is implemented through national legislation. In emission control areas, the regulations are even stricter, as they limit the sulphur content to 0.1%. These environmen - tal areas currently cover Northern Europe, the Bal - tic Sea area, USA, Canada and parts of Asia. Vessel operators have three options to ensure their vessels comply with these regulations: • place scrubbers on ships; • switch to very-low-sulphur fuel oil (VLSFO); or • switch to alternative fuels such as liquefied petro - leum gas (LPG) or liquefied natural gas (LNG). The ILT is the competent authority responsible for monitoring and enforcing compliance. 9.3 Trade Sanctions The Netherlands implements sanctions adopted by the EU and the United Nations within the EU sanc - tions framework. EU decisions are transposed into Dutch law through sanctions orders issued pursuant to the Sanctions Act 1977, while EU regulations are directly applicable and prevail over conflicting national legislation. Dutch sanctions apply to designated countries, indi - viduals and entities, and are binding on all persons and entities operating in or from the Netherlands, including international companies with a Dutch presence. The
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