The Netherlands Strengthens Regulatory Regime for Representative Offices of Trusts
Published: | 28.11.2017 | news
The Dutch Government plans to strengthen the regulatory regime for representative offices of Dutch trusts, preventing tax evasion and fraud. Recently the Minister of Finance Wopke Hoekstra has announced the key provisions of the new supervisory mechanism approved by the Council of Ministers. In accordance with the introductions, the trust management scheme should be organized as a private or state company (BV or NV) and fulfill certain requirements within the framework of the test for physical presence in the country. Passing the test involves conducting day-to-day management of the trust in the territory of the Netherlands by at least two of its managers. Another significant change is the ban on the provision of trust management services and tax planning to the same person, as well as on the transfer of their competencies with respect to observing the compliance requirements for external management. The obligation to exchange information with each other within the framework of a due diligence mechanism is also introduced for the trusts, so the client who does not meet the verification requirements in one company will not be accepted into another. The reformed legislation extends the supervisory powers and rights of the Dutch Bank (DNB) regarding the imposition of sanctions. Now the amount of fine imposed on the trust may reach 5 million euros (comparing with the maximum penalty of 4 million euros earlier). In addition, the Bank is now given the opportunity to revoke licenses for the right to do business. The bill has been sent to the State Council for consultations and will be published after submission to the House of Representatives.