Corporate governance Netherlands: Annual obligations for Dutch legal entities
Every year, companies must comply with certain obligations to meet the requirements of the Dutch Civil Code (DCC). These obligations, for example annual financial statements or general meetings, ensure that companies’ information remains transparent and that they can implement good corporate governance. The Ecovis consultants explain the details of these commitments.
Annual accounts
In the Netherlands, a company’s annual accounts must be adopted each year, after which the shareholders (and, in the case of large companies, an accountant) can check whether they agree with the financial statements presented. The adoption must take place each year within five months of the end of the financial year. This means before May 31 if the financial year is the same as the calendar year. This period can be extended once per year. The financial statements must include:
- A balance sheet
- A profit and loss account
- Notes on the financial data
Once the shareholders have approved the financial statements, the document must be filed at the Chamber of Commerce so that the financial statements are publicly accessible. The deadline for filing is eight days after approval by the shareholders.
“We advise you on legal and tax issues relating to corporate governance.”
Allard Schuering, Civil-law Notary, Partner, KienhuisHoving – Member of ECOVIS International, Utrecht, Netherlands
General meetings
According to the DCC, general meetings of shareholders must be held at least once a year. This is necessary for the adoption of the annual accounts, but also for decisions regarding the distribution of dividends, the appointment or dismissal of directors and other important matters. The general meeting must take place within six months after the end of the financial year. An invitation is usually sent out before the meeting, presenting the agenda and the annual accounts.
Tax obligations
Every legal entity is also required to pay taxes. The most important taxes with deadlines are corporate income tax (Vennootschapsbelasting, VPB) and sales tax (BTW).
- VPB: This is the tax that companies must pay on their profits. The tax return must be filed within five months after the end of the fiscal year. The tax rate for corporate income tax can vary depending on the amount of profit.
- BTW: Companies are required to file monthly, quarterly, or annual returns for the BTW they have received and paid. The frequency of filing depends on the company’s turnover.
To be prepared for these annual obligations, it is important for a company to keep its records up to date throughout the year. This will lead to fewer surprises after the end of the financial year.
