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1. TAXPAYERS

4. Individuals. — Regardless of their nationality, individuals are subject to the income tax on their total income if they reside in N.E.I. If non-resident, they are taxable only on income from specified sources (see paragraph 9). Individuals who are normally resident in N.E.I., but go abroad temporarily, remain taxable as residents unless they stay abroad more than one year, in which case their liability is restricted to that of non-residents.

5. An individual is generally regarded as being resident in N.E.I., for the purposes of the income tax, if he lives in the country, or intends to live there for an indefinite period, whether in a rented house, a hotel, or any other dwelling-place, the liability extending from the beginning of this period. If an individual enters N.E.I. temporarily, and remains taxable as a resident in his own country, he will not be taxable in N.E.I. as a resident unless his stay lasts for more than one year, the liability to taxation as a resident beginning with the second year. The term “non-resident” refers to a person who does not fulfil this requirement. A non-resident does not incur any liability in respect of income from a trade, profession or employment which is exercised in N.E.I. for less than three months; but, if he is engaged in such activities for more than three months, he is taxable on the income derived from the beginning of that period. The circumstances of the numerous individuals who make short trips to N.E.I. on behalf of foreign enterprises are so varied, that the application of the principles just stated depends largely on the facts of each particular case.

6. Partnerships. — If resident in N.E.I., a partnership is not ordinarily taxed itself, but its members are assessed on their respective shares of its income. Thus, if a member is an individual or another partnership, the distributive share will be included in the assessment to the income tax or, if a company, in the assessment to the company tax. However, if one or more of the members of a resident partnership are unknown, or if their distributive share of its income is uncertain, the authorities may tax the partnership instead of its members. A non-resident partnership is subject, as a partnership, to the income tax in respect of income from specified sources (see paragraph 9). The tax may be assessed, however, on each partner of the non-resident partnership if he chooses to declare his share of its income from the indicated sources.

7. For the purposes of this report, a partnership is regarded as being resident in the country where it is organised, or where it has its real centre of management, if the latter is in a different country. In fact, except for partnerships organised by citizens of the Netherlands, most partnerships composed of nationals of other countries are organised and registered in N.E.I., and therefore come within the term “resident partnerships”.

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