Dear FS professional, 

We hope that the New Year got off to a good start for everyone. In the FS field, right at the end of last year, the Supreme Court ruled that pension funds with a defined benefit (DB) plan, as in the case in question, cannot be regarded as a special investment fund within the meaning of the VAT-exemption. The management of this pension fund is therefore not VAT-exempt. You can read more about this case in this edition of our Financial Services Tax Newsletter.

Furthermore, the following publications have recently been released:

Last but not least, in December a Meijburg delegation met with representatives from DNB to discuss the initiatives from the regulator to focus on tax planning in the context of Systematic Integrity Risk Analysis (SIRA) in 2017. I refer to the first topic below.

Niels Groothuizen,
Partner, Financial Services Tax Group

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Table of Contents

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1. The Dutch central bank’s outlook on aggressive tax planning

The Dutch central bank (De Nederlandse Bank; DNB) recently published a brochure (Dutch) in which financial institutions can read what they can expect from DNB in 2017 and what DNB, as regulatory authority overseeing the financial soundness and integrity of the Dutch financial sector, expects from these institutions. The brochure also presents DNB’s outlook on aggressive tax planning: in 2017, DNB will continue its investigation of the involvement of financial institutions in facilitating financial constructions that impede the transparency of persons and businesses for government bodies (such as the Dutch tax authorities).

For more information about this, please contact Niels Groothuizen.

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2. Management of pension funds with a defined benefit (DB) plan not VAT-exempt

The Supreme Court has ruled that pension funds with a defined benefit (DB) plan, as in the case in question, cannot be regarded as a special investment fund within the meaning of the VAT-exemption. The management of this pension fund is therefore not VAT-exempt. 

If you would like to read more, please visit our website.

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3. Mutual agreement regarding the application of Article 10(2)(b)(ii) of the UK-NL Tax Treaty to “pension funds or pension schemes arranged through insurance companies”

On December 22, 2016 the competent authorities of the United Kingdom and the Netherlands have reached the following mutual agreement regarding the application of Article 10(2)(b)(ii) of the tax treaty to “pension funds or pension schemes arranged through insurance companies”, within the meaning of paragraph III(b) of the Protocol to the tax treaty (2011).

In the case of such pension schemes arranged through insurance companies, questions have been raised as to whether claims for the benefits afforded by Article 10(2)(b)(ii) should be made by the contributing pension schemes in their own right, or by the insurance company, which is not itself a pension fund or a pension scheme. In this regard, the competent authorities consider that only the insurance company or its custodian(s) (and not the contributing pension schemes) will possess or be able to obtain the information and tax certificates necessary to compile and support a claim for benefits under Article 10(2)(b)(ii). The agreement also stipulates which information must be provided.

For more information about this, please contact Robert van der Jagt.

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4. Update on Tax authorities’ access to beneficial ownership information

On July 5, 2016, the European Commission proposed amendments to the Anti-Money Laundering Directive (‘AMLD’) (2015/849/EU) and the Directive on Administrative Cooperation (‘DAC’) in the field of direct taxation (2011/16/EU). In relation to beneficial ownership, the following AMLD amendments were proposed:

  • full public access to the UBO registers regarding companies and business trusts;
  • reduction of the percentage necessary to qualify as a UBO from 25% to 10% for “Passive Non-Financial Entities” (e.g. unlisted investment companies); and
  • direct interconnection of the UBO registers between Member States to facilitate the cooperation between Member States.

On November 25, 2016, the Council of the European Union published the compromise text of the proposal for amending the fourth AMLD. Of the initially proposed measures mentioned above, the former two have been deleted, leaving the direct EU-wide interconnection of the registers as the only UBO-related amendment.

On December 6, 2016, the ECOFIN formally adopted the proposal which amends the DAC, granting access for tax authorities to anti-money laundering information, especially customer due diligence information and information on beneficial ownership.

For more information about this, please contact Michèle van der Zande or Barry Larking.

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5. Updates for Qualified Intermediaries

The IRS has launched a new portal for Qualified Intermediaries (“QIs”) which allows users to manage and maintain their QI system statuses online. This system is separate from the FATCA portal. Since the previous QI Agreement generally expired at the end of 2016, QIs seeking to renew their QI status must do so on the new QI portal. QIs have until March 31, 2017 to submit a renewal application for QI status in order to be treated as QIs effective January 1, 2017. Here is the link to the QI portal. A new QI Agreement effective January 1, 2017 has also been published by the IRS, which can be accessed here.

KPMG has prepared a report on the new QI agreement, which can be accessed here

The US Department of Treasury has issued new withholding Regulations that affect QIs (as well as FFIs under FATCA). See links to the Regulations here. A summary issued by KPMG can be accessed here.

If you have questions regarding the above, or any other QI/FATCA/CRS matters, please contact Jenny Tom.

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