The proposal now stipulates that each banking entity that operates as a bank in the Netherlands qualifies as potential taxpayer (standalone taxpayer). The taxpayer could also be the Dutch parent of a group or part of group (group head as taxpayer). Whether or not the banking entity which operates as a bank in the Netherlands has its seat in the Netherlands is irrelevant.
Potential taxpayers are identified as:
- Dutch resident entities with a banking licence issued by the Dutch Central Bank (De Nederlandsche Bank). This includes subsidiaries of foreign banks which have their corporate seat in the Netherlands and are authorised to operate as a bank in the Netherlands. The Explanatory Memorandum refers for the definitions of “authorisation” and “bank” to the Dutch Act on Financial Supervision (Wet op het financieel toezicht);
- EU/EEA passport entities. This includes Dutch branches of an EU/EEA entity which operate on the basis of a banking licence from another jurisdiction. These branch offices do not need a banking licence from the Dutch Central Bank to fall under the proposed legislation. For the bank levy to apply to these branch offices it is sufficient that the branch office has received a confirmation from the regulator that the regulator is aware that the foreign bank intends to operate as a bank in the Netherlands. For the avoidance of doubt, the branch should have a physical presence in the Netherlands. Foreign banks offering their services in the Netherlands through the internet do not fall within the scope of the proposed legislation.
- Branch offices of other foreign licensed banks. This includes Dutch branch offices of foreign entities with a physical presence in the Netherlands that do not hold a EU/EEA passport, but that are nevertheless licensed to operate as a bank in the Netherlands by the Dutch Central Bank.
If any of the entities mentioned above either alone, or together with other entities, is part of a wider group of entities headed by a Dutch parent which prepares consolidated accounts, the bank levy is not levied from that individual entity but from the Dutch parent that prepares the consolidated accounts. This is the case even if the Dutch parent itself does not operate as a bank. When establishing the extent of the consolidation, the accounting principles of the consolidating entity are paramount. These accounting principles will either be IFRS or Dutch GAAP. This means that “control” will be the principal test on which to base the consolidation requirement. If the Dutch group parent has control and supervision over a subsidiary, it is in principle required to consolidate its subsidiary’s accounts with its own. This includes subsidiaries resident in other jurisdictions.
In the Explanatory Memorandum the following examples are given:
Example 1: Dutch group
In this example Dutch entity (2) has a banking licence issued by the Dutch central bank. Under the proposed legislation it is not just Dutch entity (2) which will be subject to the bank levy, but the entire group of entities consisting of Dutch entities (1) to (4), as well as the two foreign entities. The obligation to actually pay the banking levy in this example shifts from Dutch entity (2) to the group Dutch parent entity (1).
Example 2: Dutch group as part of a wider international group
In this example, Dutch entity (1) has a banking licence issued by the Dutch Central Bank. Under the proposed legislation it is not just Dutch entity (1) which will be subject to the bank levy, but the entire Dutch group of entities consisting of Dutch entities (1) to (3), as well as the foreign subsidiary of Dutch entity (3).
Under certain circumstance the consolidating entity will not be the taxpayer for bank levy purposes, but the bank levy will be levied from the entity that actually operates as a bank. This will be the case if the activities of the Dutch group or the Dutch part of the wider international group only consist of banking activities to a limited extent. In this context “limited” means that the balance sheet of the Dutch group entity, or the Dutch part of the international group, is less than the “efficiency exemption” threshold of EUR 20bn or is less than 10 per cent of the consolidated balance sheet total of the Dutch parent company (group head).