It is all about supplying the so-called UBO data. UBO stands for ‘ultimate beneficial owner’ or: the ultimate owner of a company. Until the introduction of this European law in 2020, it could hide behind a web of other companies or trusts.
Criminals and terrorists could thus remain out of sight of investigative services and tax authorities, for example to launder money. In September 2020, they were cut off in the Netherlands, at least on paper.
Mandatory reporting to the Chamber of Commerce
From that moment on, everyone who registers a new company with the Chamber of Commerce (KvK) must state who the real owner is. Existing companies were given a year and a half to submit this data to the Chamber of Commerce.
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That transition period ended recently, on March 27 to be exact. And the harvest is downright meager. If all incorrect reports have been filtered out, the UBO of 52 percent of all companies was registered before the deadline expires, writes Minister Sigrid Kaag (Finance, D66). to the House of Representatives.
The Chamber of Commerce also needs to process approximately 400,000 reports already made, Kaag adds. If all of these have been ticked off, 59 percent of all companies will have their affairs in order, Kaag expects.
No openness yet
This leaves hundreds of thousands of companies that have not yet disclosed information. And that despite the one and a half years they had for this and the two warnings from the Chamber of Commerce to do it.
“A lack of sense of urgency” is the main reason for not doing it, companies indicated in a previous sample. That was partly because the transition period was so long, the companies said.
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That’s going to change. The ministry wants to take action against companies that have not yet reported their UBO, Kaag announced. After all, the companies have had enough time to report, the ministry in turn believes.
Penalties from fines to prison
A special team of the Tax Authorities, the Bureau for Economic Enforcement (BEH), will enforce, as it is then called. Violators can expect penalties ranging from fines to jail time. Incidentally, this will only happen in very exceptional cases, because the Public Prosecution Service will have to intervene. In any case, companies first receive a note with a final warning.
And even after receiving that letter, the soup will probably not be eaten as hot as Kaag is now serving it. Because there are still so many companies that have yet to register, there is far too little manpower to check them.
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This is because there has been a huge underestimation of the number of companies that would not report to the so-called implementation test. This is made by the tax authorities to see what is needed to ensure that the introduction of a new law runs smoothly.
For the UBO it was assumed that six full-time jobs would have to be created on a structural basis and 20 full-time jobs in the first five to six years after the introduction. That was calculated on 120,000 companies that would not report in a period of five years.
Make choices
That was a slightly too conservative estimate: it is expected to be between 700,000 and 800,000, reports Kaag. “This means that choices have to be made in enforcement,” she writes in the letter to parliament.
Kaag promises that the companies with the greatest risk of money laundering and terrorist financing will be the first to act. It does not state how the tax authorities know which companies have the greatest risks.
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