Increased Penalty For Not Filing Country-by-Country Reports

Increase of penalty amount in the Netherlands

Laurence Field
The Dutch Parliament took an important measure against tax avoidance. On April 18, 2017 the majority of the members voted in favour of a bill that raises the penalty for not filing the Country-by-Country Report.

Previous, the penalty for not filing the Country-by-Country Report was EUR 20.500. After the passing of the new bill this penalty is raised to a maximum of EUR 820.000. Also non-filling of the notification by a local group entity within the statutory deadline can be penalised up to the amount of EUR 820.000. The maximum  amount can be imposed after multiple violations.

Country-by-Country Report

Multinational companies with an ultimate parent (the “Ultimate Parent Entity”) that is tax resident in the Netherlands with an annual consolidated group revenue of at least EUR 750 million are required to submit a Country-by-Country Report with the Dutch tax authorities. The Country-by-Country Report contains an overview per country of aggregate information relating to the amount of revenue, profit (or loss) before income tax, income tax paid, number of employees, etc.

Also the tax jurisdiction of each group entity (the “Constituent Entity”) and the nature of the main activities of each Constituent Entity needs to be provided. By the exchange of such information between the different tax authorities, the multinational companies will have less opportunities to avoid taxes.

Required information

Group entities which are a tax resident in the Netherlands, and are part of an multinational company with a minimum consolidated group revenue of EUR 750 million must notify the Dutch tax authorities. The following information is generally required in notification forms regarding local group entities on behalf of which a Country-by-Country report has been or will be filed:

  1. name of the reporting entity
  2. address
  3. tax identification number
  4. fiscal year covered.

In compliance with Country-by-Country Reporting

Is your company able to produce a Country-by-Country Report today? Do you have the information you need to comply with Country-by-Country Reporting? Are the required data aggregation processes up to speed? To avoid a penalty these questions need to be answered positively.

Feel free to contact us in case you want to receive information about Country-by-Country Reporting, or if you need advice on your specific situation.

This article was written by Hans Missaar, Crowe Peak.

In Netherlands, contact

Hans Missaar, Crowe Peak
+31 (0)88 2055 000

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Laurence Field
Laurence Field
Partner, Corporate Tax