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VAN LANSCHOT N.V. FISCAL POLICY
'Monitoring fiscal affairs'
This policy replaces the Van Lanschot N.V. Fiscal Policy of October 2013
This policy was adopted by the Executive Board on 12 July 2016
This policy was approved by the Audit and Compliance Committee on 22 August
2016
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Contents
1
Introduction ..............................................................................................................................4
1.1 General ..............................................................................................................................4
1.2 Scope .................................................................................................................................4
1.3 Content ..............................................................................................................................4
1.4 Individual Horizontal Supervision covenant .....................................................................4
2
Risk Appetite, tax principles, and fiscal objectives .................................................................4
2.1 Risk Appetite .....................................................................................................................4
2.2 Tax Principles ....................................................................................................................5
2.3 Fiscal objectives ................................................................................................................5
3
Fiscal policy .............................................................................................................................5
3.1 General principles..............................................................................................................5
3.2 Tax risk management ........................................................................................................6
3.3 Tax position in the annual accounts ..................................................................................6
3.4 Tax returns .........................................................................................................................6
3.5 Tax planning ......................................................................................................................7
3.6 Products and services ........................................................................................................7
3.6.1
General principles regarding Van Lanschot's clients ................................................7
3.6.2
Policy in regards to general banking products ..........................................................8
3.6.3
Policy in regards to structured activities ...................................................................8
3.7 Contact with external tax and other advisers and trade associations .................................9
3.7.1
External tax and other advisers .................................................................................9
3.7.2
Trade associations......................................................................................................9
3.8 Consultation with Dutch Tax and Customs Administration..............................................9
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1
Introduction
1.1
General
This document sets out the fiscal policy at Van Lanschot N.V. (hereafter referred to as 'Van Lanschot').
This document is an update of the previously established Fiscal Policy and replaces the document 'Van
Lanschot N.V. Fiscal Policy' from 2013.
The Van Lanschot Executive Board is responsible for establishing and complying with the policy. The
Fiscal Policy was approved by the Audit and Compliance Committee (ACC). Important changes to the
policy are also submitted to the Audit and Compliance Committee (ACC).
1.2
Scope
The Fiscal Policy covers all tax types and tax processes that are of importance to Van Lanschot and all
bodies in which it has control.
In the case of minority interests/interests in which Van Lanschot does not have control, the fiscal policy is
applied by means of the influence which Van Lanschot can exercise as a shareholder.
1.3
Content
This policy covers:
o Risk Appetite, Tax principles, and fiscal objectives
o The general fiscal policy
o The fiscal policy for specific categories
o Contacts with tax consultants and trade associations
o Consultation and covenant consultation with the Dutch Tax and Customs Administration
1.4
Individual Horizontal Supervision covenant
On 20 September 2012, Van Lanschot entered into an individual Horizontal Supervision covenant with
the Dutch Tax and Customs Administration. Van Lanschot and the Dutch Tax and Customs
Administration aim to use effective and efficient working methods. In this regard, Van Lanschot offers
permanent, up-to-date insight into relevant activity and the Dutch Tax and Customs Authority improves
the legal certainty by quickly defining its position. The relationship between the Dutch Tax and Customs
Administration and Van Lanschot is based on transparency, understanding, and trust. Van Lanschot
undertakes to ensure a system of internal management, internal checks, and external checks, with the goal
of drawing up and submitting acceptable tax returns.
2
Risk Appetite, tax principles, and fiscal objectives
2.1
Risk Appetite
Van Lanschot has published its vision and mission. In its strategy to achieve this vision and mission, Van
Lanschot has given prominence to the preservation of the bank's solid profile. Fiscal risks are to be
managed within the context of this solid profile.
In addition, Van Lanschot has a social function as a financial institution and a component of the financial
system, and a good reputation is extremely important to this. In this regard it is important to keep in mind
the continually changing social ideas about taxation. Within this context, a cautious risk appetite is a
suitable fiscal strategy (strategic fiscal objectives translated into concrete actions) for the bank. In the
current entrepreneurial climate, the society, regulatory authorities, and implementing bodies such as the
Dutch Tax and Customs Administration are increasingly requiring what is called 'Good Corporate
Citizenship'. Concepts such as transparency and trust play an important role in this regard. Van Lanschot
subscribes to these concepts and applies them where possible. In this regard, we take account of the
interests of various stakeholders, including our clients, shareholders, employees, the Dutch Tax and
Customs Administration, regulators, and society at large.
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2.2
Tax Principles
This cautious fiscal risk appetite is the foundation for the creation of a number of guiding Tax Principles.
These Tax Principles are a way for the bank to represent its fiscal values. These principles address both
our own fiscal position and that of our clients. The Tax Principles are published on the corporate website,
making them available to everyone. It is important that Van Lanschot follow these principles in practice
and be continuously aware of them. The Tax Principles have been anchored in the organization through
the set-up and maintenance of a Tax Control Framework (TCF). The Tax Principles can be found in
Appendix 1 of this policy.
2.3
Fiscal objectives
Fiscal objectives have been formulated on the basis of the Van Lanschot Risk Appetite and Tax
Principles. The fiscal objectives are appropriate for Van Lanschot's cautious risk profile.
The fiscal objectives are:
1.
identifying, managing, and avoiding fiscal risks, including general risks to reputation relating to or
caused by taxation, in a structured, effective, and efficient way.
2.
obtaining a reliable fiscal position in the Van Lanschot consolidated annual accounts.
3.
demonstrably complying with fiscal laws and regulations, submitting correct tax returns 1 and
avoiding fines and additional assessments.
4.
adequately managing the tax risks of tax planning.
5.
maintaining and open and transparent relationship with the Dutch Tax and Customs Administration
and other stakeholders.
The following policy was formulated on the basis of the principles set out above.
3
Fiscal policy
3.1
General principles
Van Lanschot is aware of its social function and position in society. This same awareness shapes our
attitude in terms of taxation. In light of this, we follow a number of tax-related principles that indicate
how, in our opinion, a responsible taxpayer ought to behave. As part of these principles, we take account
of the interests of various stakeholders, including our clients, shareholders, employees, the tax authorities,
regulators, and society at large.
Van Lanschot always acts in conformity with the fiscal legislation and regulations. In addition, we are
governed by international norms. We follow both the letter and the spirit of these laws and norms. In our
business operations, we apply the fiscal legislation and regulations efficiently and transparently Van
Lanschot does not support tax evasion.
We acknowledge the tasks and responsibilities of the Dutch Tax and Customs Administration and other
tax authorities and, where desired, provide our full cooperation for the sake of the optimum performance
of these tasks. Van Lanschot communicates with the Dutch Tax and Customs Administration on a basis of
transparency, understanding, and trust2 .
1
The Dutch Tax and Customs Administration discusses the submission of acceptable tax returns on page 42
of its publication 'Supervision Large Business in the Netherlands'. As stated in the OECD report 'Co -operative Tax
Compliance: Building better Tax Control Frameworks' dated 13 May 2016, the importanc e of a TCF arises from:
'… its ability to provide a verifiable assurance that the information and returns submitted by a taxpayer are both
accurate and complete.' For several years, one of Van Lanschot's objectives has been to submit an accurate tax
return.
2
These concepts have been set out in the Covenant with the Dutch Tax and Customs Administration.
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Van Lanschot's policy is focused on obtaining certainty about tax matters in an early stage. This can be
accomplished by carrying out preliminary consultation and, where possible, submitting fiscal issues to the
Dutch Tax and Customs Administration for approval in advance. If an advance tax ruling or other ruling
is agreed on with the tax authorities, it will be regularly evaluated internally (on the basis of new legal
precedents and an evaluation of deadlines and possibilities for extension).
Van Lanschot continuously informs the Fiscal Affairs department of fiscal issues, in an early stage. This
is done in such a way that the fiscal function can be carried out at the right level and at the right time.
Fiscal documents (decisions, assessments, returns, etc.) and fiscal correspondence are registered,
evaluated, and processed by Fiscal Affairs. Documents and correspondents received in and/or sent to
other departments are immediately sent to Fiscal Affairs.
Where this policy mentions the Dutch Tax and Customs Administration, it also applies to foreign tax
authorities, in the spirit of the covenant agreements made with Dutch Tax and Customs Administration,
where necessary on the basis of reciprocity.
3.2
Tax risk management
Van Lanschot ensures the existence of a system of internal management and internal and external checks.
It does this through setting up and maintaining a Tax Control Framework (TCF). Fiscal Affairs is
responsible for maintaining the TCF. The set-up and details of the fiscal function, the TCF, and the
monitoring of and reporting on the TCF are described in more detail in the document 'Van Lanschot N.V.
Tax Control Framework Policy'.
Once every two years, Van Lanschot's tax risk profile is reviewed and revised as needed. The risk profile
determines which tax risks are important (Key Tax Risks) and, as such, it is an explicit component of the
TCF. These Key Tax Risks are covered by Tax Controls (the key controls within the TCF).
Files contain sufficient qualitative documentation to provide a foundation for estimating tax risks and
adequately carry out future discussions with the client or with tax authorities. Examples of documents of
this nature include opinions, contracts, copies of passports, returns, annual accounts, etc.
Group Audit regularly assesses the workings of the TCF.
3.3
Tax position in the annual accounts
Establishing the tax position in the annual accounts is a fully-fledged component of Van Lanschot's
applicable policy on drawing up the annual accounts and other external financial reports. The basic
principle in this regard is that the fiscal positions reported are correct. There is no reason to draw up a
separate tax policy for this component.
Fiscal Affairs is provided in good time with the information needed to support Finance, Reporting, and
Control (FRC) in determining the fiscal position in Van Lanschot's consolidated annual accounts.
3.4
Tax returns
Van Lanschot endeavours to submit correct tax returns 3 .
Van Lanschot endeavours to work with up-to-date information. Tax returns covering a past period of time
are submitted as quickly as possible after that period of time has passed. The information requested by the
Dutch Tax and Customs Administration is submitted in full and clearly, as quickly as possible.
Van Lanschot submits relevant fiscal and other positions taken or to be taken to the Dutch Tax and
Customs Administration as quickly as possible. This refers to matters regarding which a difference of
opinion with the Dutch Tax and Customs Administration could arise, as a result of, for instance, a
difference in the interpretation of facts or legislation. Van Lanschot provides the Dutch Tax and Customs
3
See footnote 1.
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Administration with active insight into all relevant facts and circumstances, its positions, and its vision on
the corresponding legal consequences.
It cannot be ruled out that Van Lanschot and the Dutch Tax and Customs Administration differ in their
understanding of the effects and explanation of fiscal laws and regulations. If Van Lanschot takes a
particular position regarding the fiscal position in the annual accounts, it is more likely that that position is
correct than that it is incorrect (>50% chance that in legal proceedings, the position taken will be judged
favourably). Regarding questions with major financial impact (at least €250,000), an opinion/advice is to
be sought from a respected tax consultancy firm. The opinion or advice must at least include an opinion
on which the desired position can be based.
3.5
Tax planning
Tax planning can be described as the systematic analysis of the various fiscal options, aimed at
minimizing or decreasing the total tax expense, now and in the future. Examples of tax planning in this
context include the timing of the sale of an asset item, the moment when a liability item must be effected,
and the moment when a tax entity must be formed, as well as whether tax structures can be implemented
which will result in a decrease of the total tax expense. When evaluating these tax structures in particular,
as well as other fiscally structured activities, Van Lanschot takes its social position and good reputation
into account.
Van Lanschot limits itself to regular tax planning (such as reducing taxes within acceptable limits and
preventing double taxation) and does not address aggressive tax planning (such as double non-taxation
and the exploitation of mismatches)4 .
Tax planning is not an end in and of itself. For Van Lanschot, the basic principle of tax planning is that
business reasons must always be the basis of tax structures or fiscally structured activities. Tax structures
or fiscally structured activities, and particularly the fiscal and other viewpoints taken or to be taken in
relation to them, are always submitted to the Dutch Tax and Customs Administration in advance.
On 22 December 2009, Van Lanschot and the Dutch Tax and Customs Administration entered into an
agreement regarding the conclusion of structured financial transactions. The definition of structured
financial transactions is given in the agreement itself. It refers to transactions without economic
significance, or transactions whereby actions without economic significance are included for fiscal
reasons and which are only concluded for the sake of achieving tax advantages. It has been agreed that
Van Lanschot is not to conclude any structured financial transactions as of the date of the agreement. The
agreement has a term of five years, and after this period it is automatically extended, always for a period
of three years.
All forms of tax planning are jointly evaluated and managed by Fiscal Affairs.
3.6
Products and services
3.6.1
General principles regarding Van Lanschot's clients
Clients are responsible for their own tax position. We assume that our clients have fiscal integrity. Where
necessary, we will form an opinion of our clients' fiscal integrity and act according to this.
Taxation is one of the elements assessed when developing products and offering services.
In contrast to general tax advice that directly relates to and supports our banking services and other
services, we do not issue any tax advice in a general sense to clients. Van Lanschot does not act as a tax
adviser to its clients. In those cases with specific individual fiscal consequences, Van Lanschot always
reminds clients of their own responsibility to have their own tax adviser evaluate the fiscal consequences.
4
These terms are used regularly without the availability of a clear definition. The examples indicate the
connotations of the relevant terms.
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We do not carry out any trust activities for our clients.
Since 2009 we have been bound by our Fiscally Improper Conduct Policy, which defines what Van
Lanschot sees as improper conduct. The policy is overseen by the Compliance department. Van Lanschot
does not facilitate any fiscally improper conduct.
3.6.2
Policy in regards to general banking products
General banking products are understood to be products and services which Van Lanschot customarily
offers to a large group of clients and in which taxation can play a role. 5
General banking products developed by Van Lanschot must comply with legislation and regulations and
Van Lanschot's own internal guidelines.
General banking products which Van Lanschot develops or helps to develop are evaluated by Fiscal
Affairs on the basis of the New Product Approval/Product Review procedure.
The basic principle is that essential fiscal aspects 6 must be coordinated with the Dutch Tax and Customs
Administration. This can also be done by complying with and approving agreements made by the
Netherlands Bankers' Association relating to the fiscal processing of banking products.
If it is not possible to reach prior agreement with the tax authorities in relation to a particular product, a
respected tax consultancy firm will be asked for its fiscal opinion in regards to essential fiscal aspects.
That opinion must contain at least a 'should' judgement for all components (>70% chance that in legal
proceedings, the position taken will be judged favourably). 7 In cases where Van Lanschot has a financial
interest of €10,000,000 or more, the opinion must contain a 'will' judgement for all components (>90%
chance that in legal proceedings, the position taken will be judged favourably).
3.6.3
Policy in regards to structured activities
Structured activities are defined as the facilitation of clients' fiscally structured activities through offering
banking products, including general banking products. 8 Van Lanschot regularly evaluates the social
acceptability of various client activities, including structured activities, and Van Lanschot's role in these
activities.
Structured activities developed by Van Lanschot must comply with legislation and regulations and Van
Lanschot's own internal guidelines.
In cases where Van Lanschot offers banking products in support of the client's fiscally structured
activities, Van Lanschot must have on file a copy of a fiscal opinion or fiscal advice addressed to the
client from a respected tax consultancy firm. The opinion or advice must contain the relevant facts and the
relevant fiscal consequences of the fiscally structured activities. If and to the extent that the fiscal
consequences of certain aspects are set out in an agreement with the Dutch Tax and Customs
Administration, no opinion or advice is required for those aspects, but Van Lanschot must have a copy of
the agreement.
5
Examples include lending operations (loans, mortgages, etc.), provision of securities services (IGCs, etc.),
savings (index deposits, life-course savings schemes, etc.), and blocked bank savings accounts (annuities, etc.).
6
This refers to aspects that are of essential importance to the client when deciding whether or not to purchase
a product.
7
Within the range of various opinions, the 'will' opinion is the strongest level of certainty. In the case of a
'will' judgement, there is clear legislation or a clear ruling from the Supreme Court of the Netherlands based on
significantly similar facts. Many cases will result in a 'should' judgement, given that there will always be some
elements or facts that differ from the case given in the legal precedents. An opinion does not, in and of itself,
constitute a guarantee, but it does provide an opinion on what the relevant tax law is.
8
Examples of structured activities include the transfer of assets abroad, entrusting assets to children while
maintaining control of the assets, and putting assets into a separate entity for purposes of tax advantages (family
foundations, tax-exempt investment institutions, private foundations, etc.).
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Files contain sufficient qualitative documentation to provide a foundation for estimating tax risks and
adequately carry out future discussions with the client or with the Dutch Tax and Customs
Administration. Examples of such documentation include opinions/advice, agreements with tax
authorities, contracts, copies of passports, tax returns, annual accounts, statements by the client on tax
risks, etc.
3.7
Contact with external tax and other advisers and trade associations
3.7.1
External tax and other advisers
Fiscal Affairs is responsible for selecting and managing external tax advisers with regards to individual
forms of tax revenue. In principle, assignments are granted to external tax advisers by or in consultation
with Fiscal Affairs. The consent of the director of Finance, Reporting, and Control is obtained before
granting large assignments to external tax advisers. Large assignments are defined as assignments
covering a fiscal topic worth more than €20,000.
Situations in which external consultancy firms are contacted include:
o when specialist knowledge is required.
o in order to consult with colleagues on specific tax matters.
o large projects.
o when opinions and advice must be provided.
o periodically utilizing the combined creativity and experience of consultancy firms.
In principle, externally obtained tax advice is set out in writing. Copies of advice obtained from external
sources are shared with the relevant departments.
3.7.2
Trade associations
Fiscal Affairs actively participates in knowledge groups and sections within trade associations and interest
groups in order to share knowledge and to represent Van Lanschot's fiscal interests as well as possible.
Individually obtained knowledge is documented and shared with the relevant departments.
3.8
Consultation with Dutch Tax and Customs Administration
Fiscal Affairs carries out consultation with the Dutch Tax and Customs Administration. Fiscal Affairs
regularly consults with the Dutch Tax and Customs Administration on all current tax matters. Minutes are
made of the discussions.
Important topics are coordinated with the CFO and the director of Finance, Reporting, and Control. The
agreements reached with the Dutch Tax and Customs Administration, as well as the progress made on
those agreements, are monitored by means of the agreement overview, a component of the TCF in which
the performance and period of validity of agreements is set out.