Caution: obligation to declare benchmark report
Written by: Lisbeth De Laet
The Dutch External Financial Relations Act of March 1994 imposes an annual obligation to declare on Special Financial Institutions or SFIs (BFIs in Dutch). These must submit their benchmark report to the DNB Bank (De Nederlandsche Bank) every year for the DNB to investigate the legitimacy of their balances and transactions. Sometimes this is forgotten. Therefore, action needs to be taken.
SFI: Special Financial Institution
All resident enterprises and institution qualify as an SFI, irrespective of their legal form, if:
- non-residents hold a direct or indirect interest – whether or not through shareholding - in the enterprise or institution or otherwise exert influence; and
- these non-residents’ objective it is, or whose activities consist to a significant extent, whether or not these activities are performed in combination with other domestic group companies:
1. to mainly hold assets and liabilities abroad; and/or
2. to channel revenues consisting of royalty and licensing proceeds received abroad to foreign group companies; and/or
3. to generate revenues and expenses that mainly originate from re-invoicing from and to foreign group companies.
Obligation to declare a benchmark report
Hence, if you run a resident enterprise or institution that meets this definition, it is considered an SFI. You are thus obligated to file a benchmark report with the DNB. This also entails that you are legally obliged to register the SFI registered accordingly with the DNB. Based on the benchmark report, which accounts for a company’s balance of payments and international investment position, the DNB can assess your company’s position in the international market and the legitimacy of the transactions.
Moreover, a composing an annual benchmark report might be to your benefit too, as the report charts the annual growth and economic sustainability of your enterprise or institution.
Please do not hesitate to contact us for more information on benchmark reports or submitting these to the DNB.