Dutch CESOP proposal sent to House of Representatives has been saved
Dutch CESOP proposal sent to House of Representatives
On 24 October 2022 the draft legislative proposal to implement CESOP in the Netherlands was sent to the House of Representatives (“Tweede Kamer”), including the Explanatory Memorandum to the draft law.
24 October 2022
At its core, the legislative proposal remains unchanged from most recent published versions. It is now accompanied by an updated version of the Explanatory Memorandum, a response to the Council of State’s report and an Implementation Assessment. The most striking points in this new set of documents are:
- Response to Council of State
Included in the documents sent to the House is a response to the critical report issued by the Council of State (see our earlier post on this). The Council of State raised concerns on (among other things) the effectiveness of the measure and the safeguarding of privacy rights. In the reply, the government takes the position that no substantive changes to the proposals are necessary. In relation to the concerns around privacy of payees, the importance of correctly applying the 25-payment ‘de minimis’ rule (for more on this see our CESOP summary PDF) is stressed. It is explicitly mentioned that taxpayer not applying this rule correctly, can be subject to fines (see below).
- Temporary IT- platform
The proposal details that the permanent technical solution to submit the CESOP reports will not be ready as of 2024. Therefore, a temporary submission platform will be set up and maintained for an undefined period of time until such permanent solution is developed. The government states that, also in the interim period, it expects to comply with all EU requirements.
- Maximum fine of EUR 900.000 remains
Responding to questions around the proportionality of the maximum fine of EUR 900.000 per offence (per quarterly report, i.e. EUR 3,6m per year) the government indicated it maintains this high penalty for three reasons. First, the penalty is meant to have a deterring effect. Such effect is deemed necessary to ensure compliance with CESOP on an EU level. Second, the level of the penalty is in line with other potential sanctions imposed in the financial sector and in similar cases such as various DAC reporting obligations. Third, the penalty is a maximum and should normally be imposed at an amount taking into account the seriousness of the offence and the size of the company.
We have come one step closer to the implementation of CESOP in the Netherlands. All EU countries will move forward at their own pace, and we are keeping an eye on the way the legislative process progresses throughout the EU. If you need support or would like to discuss what CESOP means for the jurisdictions where your organization provides payment services, reach out to any of your usual Deloitte advisors, or contact one of our specialists below.