Dear FS professional,
This issue of our FS Tax Newsletter contains recent developments within the Financial Services sector, such as the Opinion of the Advocate General in the DPAS Limited case. If you would like to stay updated on other tax-related topics, please visit our website or download the following memorandums:
- Deputy Minister provides more insight into his future tax plans (click here)
- European Commission releases package on taxation of the digital economy (click here)
- Political agreement reached on proposal for mandatory disclosure of reportable cross-border arrangements by intermediaries (click here)
- Court of Justice of the European Union also applies per element approach to the Netherlands (click here)
- Update on the progress of the UBO register in the Netherlands (click here)
If you would like to know more about the matters addressed in this newsletter please contact us.
Niels Groothuizen, Partner, Financial Services Tax Group
Table of Contents
- 1. Upcoming events
- 2. VAT exemption not applicable on instruction to transfer money
- 3. Maximum bonus for high frequency brokers
- 4. Updated CRS / FATCA questions and answers
1. Upcoming events
FS VAT seminar Meijburg & Co (Amstelveen, April 12, 2018)
This year the 10th edition of our FS VAT seminar will take place. The theme is 'From Retro to Robot'. We look forward to future VAT developments in the financial sector with you. We do this against the background of various VAT developments that have taken place in the past ten years.
Please contact Gert-Jan van Norden for more information on this seminar.
Client Tax Integrity Seminar
In response to the 2017 Dutch Central Bank (De Nederlandsche Bank; DNB) survey into aggressive tax planning and customer anonymity at 11 trust offices and their survey into the use and operation of the systematic integrity risk analysis (SIRA) of banks in practice, we are organizing a seminar on 'Client Tax Integrity'. The edition for trust offices will be held on Tuesday, April 10, 2018 and the edition for banks on Tuesday, April 17, 2018.
During the seminar we will approach the matter of Client Tax Integrity from various angles. The purpose of the seminar is, on the one hand, to provide direction on how to determine the 'tax risk appetite' of trust offices and, on the other, to give account managers an insight into the various tax issues that can arise in respect of the different customers of trust offices (what is tax evasion, what is tax avoidance, which indicators can be used for this, etc.).
The DNB will be one of our speakers, they will discuss the matter of Client Tax Integrity from DNB's perspective as regulatory authority.
Please contact Niels Groothuizen for more information on these seminars.
2. VAT exemption not applicable on instruction to transfer money
On March 21, 2018, the Advocate General (‘AG’) at the Court of Justice of the European Union (‘CJEU’) issued his Opinion in the DPAS Limited case (C-5/17). The AG concluded that the VAT exemption for payments cannot be applied to a service provider that only instructs banks to transfer sums of money. The AG concluded that giving such instructions is a “mere physical, technical or administrative service” that is not covered by the VAT exemption for payments. According to the AG, such a service does not involve the execution of the transfer itself and thus does not directly result in the legal and financial changes which are characteristic for the VAT exempt transfer of money.
3. Maximum bonus for high frequency brokers
On December, 2017, the European Commission published a revised framework for investment firms. The European Commission intends, among other things, to abolish the maximum bonus for high frequency brokers and other investment firms insofar as they are not considered to be a systematic investment firm. The reasoning behind the proposed abolition is that the current legislation does not fully take into account the different business profiles and risks of investment firms.
The Dutch government announced that it supports the EU developments mentioned above and endorses ‘a more proportional way of application of remuneration policy’. The limitation on bonuses for banking and insurance companies remains unchanged, as does the limitation on remuneration for systematic investments firms.
4. Updated CRS / FATCA questions and answers
On March 23, 2018, an updated version of the “CRS / FATCA questions and answers” decree by the Dutch Deputy Minister for Finance was published in the Netherlands Government Gazette, replacing the previous version dated September 29, 2016. The decree intends to clarify certain specific FATCA/CRS related situations.
The updated decree contains revisions to some of the existing answers and new questions concerning:
- Administrator in the context of debt rescheduling;
- Internet bank without relationship manager;
- Fiscal state of residence asylum seekers;
- Right of option NFFE under FATCA;
- Foreign phone number as sole indicator;
- Reasonable effort to obtain TIN in the context of CRS;
- Existing account of a minor child of divorced parents;
- Account opened by grandparents on behalf of minor grandchild living abroad;
- Equity funds;
- Application threshold;
- Identification requirement for listed investment funds;
- Qualification of non-profit organizations;
- Determination of gross revenues;
- Securities Lending;
- Subsidiary of Active NFFEs;
- Funeral deposits; and
- Fiscal state of residence.