Amended Dutch legislation with regard to annual accounts

Tuesday 10 November 2015

Further to the Accounting Directive 2013/34/EU, replacing existing Directives, new Dutch legislation in respect of annual accounts has been recently adopted. The new rules apply to legal entities which are subject to Title 9 of Book 2 of the Dutch Civil Code and will apply to financial years commencing on or after 1 January 2016. It is permitted to apply the new rules to financial years which started earlier. The Accounting Directive and thus the new Dutch legislation aims to reduce administrative costs for small and medium-sized companies, facilitate comparability of annual accounts and increase transparency.

The most important changes to the existing Dutch legislation are the following:

  • The threshold amounts for determining whether a company is small, medium-sized or large (two of the three criteria must be met on two separate balance sheet dates) are being increased:
      1. balance sheet total is increased to≤ €6 million for small and ≤ €20 million for medium-sized companies;
      2. net turnover is increased to ≤ €12 million for small and ≤ €40 million for medium-sized companies;
      3. the employee criteria remains unchanged;
  • Also, an optional new category of companies is being introduced, the very small companies (so-called micro-entities) having a balance sheet total of ≤ € 350,000, net turnover of ≤ €700,000 and < 10 employees. As expected micro companies can benefit from the most extensive exemptions.
  • The increase of the thresholds for medium-sized companies also relaxes the rules for limitation of the number of non-executive and supervisory board seats with large N.V.’s and B.V.’s.
  • The extension of the deadline for preparing the annual accounts is being reduced by one month and the final publication deadline is being changed from 13 months to 12 months.
  • The term 'annual report' (jaarverslag) is being replaced by the term 'management report' (bestuursverslag).
  • Goodwill which has arisen on the acquisition of an associated participation can no longer be written off against equity or the profit and loss account. It is no longer allowed to capitalize research expenses.
  • Due to the implementation of the EU definition of public-interest entities (or PIEs, i.e. companies whose securities are traded on a regulated market of a Member State and licensed credit institutions and insurance companies) Dutch companies whose securities are traded on an unregulated market in the EU or on any market outside the EU may benefit from the exemptions based on the small or medium-size company regime, which until now was not permitted.
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