Tax Treaty Case Law around the Globe 2014

S. 55Chapter 6 Netherlands: Income from Former Research and Fixed Base and an Origin-Based Alternative

Eric C.C.M. Kemmeren

6.1. Introduction

Research and development (R&D) is essential for creating intangibles that are important value drivers for income-producing activities. In some cases, researchers from various states of globalized economies may be involved and they may frequently operate for a limited period of time in another country than their home country. The relationship between the researchers and R&D centres may vary widely. Not only are employees contracted, but also independent contractors may be part of an R&D team. They may earn a fixed amount of money, but they may also be remunerated with a variable compensation. Such variable compensation may be on the borderline of royalty payments and income from independent services. Since income in the context of intangibles is increasingly important in knowledge-driven economies, the tax treatment of such income under tax treaties will also gain relevance.

As a result, tax treaty case law concerning such income and its relevance for decision-making processes of companies and researchers may increase as well. Many issues, however, are...