Thursday, June 23, 2011

A bit of unintended tax history on vacation

I am currently on vacation for a week in the delightful Caribbean island of St. Martin (for the French part) and St. Maartin (for the Dutch part). This is apparently the world's smallest island to have two separate sovereigns, as the French vs. Dutch division remains operative to this day (and dates back continuously to 1648).

It turns out that the Dutch part of the island (we are staying in the French part but plan to go to a beach on the Dutch part tomorrow) used to be part of the Netherlands Antilles, which is famous in U.S. tax planning history as, in effect, the Cayman Islands of an earlier era.

Until the late 1980s, and thus overlapping with my earliest professional years, the Netherlands Antilles was THE place of choice to have a tax haven affiliate for U.S. international tax planning purposes. As it happens, the reason had to do with the application of a U.S.-Dutch tax treaty, whereas the Caymans often "works" today for entirely non-treaty reasons. But still, the word "Netherlands-Antilles" means something to me that it probably wouldn't if I were 10 years younger.

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