Global Visas

Spotlight on changes in the U.K. (by contributing writer Gavin Jones)

Over the past 12 months there have been a number of developments in the way the U.K. government has addressed foreign workers. The trend appears to be towards the government addressing the fact that it does not know how many overseas workers are in the UK and then installing a controlled immigration program. On top of this, as with most other areas of government, these programs and policies are to be funded by the users. The changes introduced last year can be summarized as follows:

All Home Office applications now require a fee. The only exception is where as a matter of EU law, fees cannot be charged (in which case the Home Office will not deal with an application quickly) or where as a matter of policy, the government has decided that it would be unfair for certain organizations to pay e.g. charities, schools etc.

All foreign nationals coming to the UK with a work permit for more than six months now must have entry clearance (a visa). Certain nationalities – visa nationals – will require a visa irrespective of the length of work permit granted; the government is introducing new machine readable codes for passport endorsements; there is now a specified form to advise the government when a work permit holder leaves their employment; the criteria under the Highly Skilled Migrant program were lowered and a lower threshold was introduced for those under 28; the restrictions on type of work and hours of work for commonwealth citizens in the UK under the working holidaymaker concession were also removed.

In 2004 it is expected that the following changes will be introduced:

1. Increased fees for applications. The government is proposing that in-country work permit application attract two fees. One for processing the work permit application (current estimate is £155 - £180), the second for passport endorsement (£95 - £125). It has been suggested that this second fee can be passed on to the employee
2. A revision of section 8 of the Asylum and Immigration Act. The documents providing the statutory defense to a charge of illegal employment is to be updated increasing the burden on employers.

Spotlight on the Netherlands

On March 8th, the United States and The Netherlands signed a protocol to the 1992 US-NL tax treaty for the avoidance of double taxation. The protocol provides, under certain conditions, for a complete exemption of withholding tax on dividend distributions from a U.S. resident company to a Dutch resident company and vice versa. Until that date such dividend distributions were subject to a 5% withholding tax. Furthermore, distributions by a U.S. branch from Dutch multinationals will under certain conditions no longer be subject to the current 5% branch profit tax.

The protocol will in principle enter into force on January 1, 2005. However, the withholding tax on dividend distributions will no longer be due after a period of two months has lapsed since the formal approval procedure has been finalized in both countries.

The Netherlands will strongly improve its position as “the gateway to Europe” for U.S. outbound investments. Furthermore, U.S. inbound investments from Europe through the Netherlands will benefit from this amendment.

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