Taxation

Ultimate Beneficial Ownership in the Netherlands

By Andre Groeneveld and Edward Hendrickx, EJP auditors & tax lawyers

Every Ultimate Beneficial Owner (UBO) with an ownership of 25% or more in a company will be registered as from this summer. This implies that the Chamber of Commerce in the Netherlands keeps a record of who has an ownership in which company and how large that share actually is (in parts of 25%).

The aim of the UBO-register is that the tax authorities, the Public Prosecutor’s Office and other investigating authorities can easily identify who is behind a company. Fraud can be easily tracked this way, and in our opinion no one could be against it.

However, unfortunately every person who has a legitimate importance can also check this register. So what is a legitimate importance? The answer is simple: Everything, even curiosity about your own neighbours.

Everyone who is prepared to spend a few euros for administration costs can now see who the stakeholder in each company is. If you combine this with the duty to publish the annual accounts, everyone has free insight into the entrepreneur’s wallet. This leads to strange situations.

Competitors, suppliers and customers can track down the structure of the company; greedy children can see how many shares their parents own and if they have already secretly donated some shares to one of the other children; even neighbours can check what their wealth is. A big question in this respect is how these UBO rules conflict with certain rules of privacy?

Companies are obligated to keep up the register. Directors and UBOs who do not cooperate can be jailed for two years. Whomever states in the corporate tax return that he has a stake of 50% in a certain company can be sure that the tax authorities will check this with the register. It is almost certain that the register will start at the end of June this year. Entrepreneurs have about one and a half years to register themselves. The Dutch Chamber of Commerce will publish the necessary forms.

Avoiding the UBO-register completely will be difficult, but redundant investments can still be placed out of sight with an adjust structure to avoid your nosy neighbours.


Andre Groeneveld

Andre Groeneveld

EJP auditors & tax lawyers, ‘s-Hertogenbosch, The Netherlands
T: +31 73 850 72 80, F: +31 73 850 72 99
E: This email address is being protected from spambots. You need JavaScript enabled to view it.; W: www.ejp.nl
Edward Hendrickx

Edward Hendrickx

EJP auditors & tax lawyers, ‘s-Hertogenbosch, The Netherlands
T: +31 73 850 72 80, F: +31 73 850 72 99
E: This email address is being protected from spambots. You need JavaScript enabled to view it.; W: www.ejp.nl
 


Published: July 2017 l Photo: ErnstPieber - Fotolia.com

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