A great deal has already been written on this subject, and this is very likely not to be our last post on the UBO register. We have written about this before (see our article Failure to meet the UBO deadline: a fine or community service) that the House of Representatives has a motion has adopted a resolution requesting the government not to impose any fines or community service orders for the time being if an entity has failed to comply with its obligation to register its UBO(s). Shortly afterwards, Minister Kaag gave the go-ahead to commence enforcement. The tax authorities have now set out what this enforcement will entail.
The UBO Register
From 27 March 2022, organisations subject to UBO reporting requirements will be in breach if they have not yet registered their UBOs. But what is a UBO? The UBO (Ultimate Beneficial Owner) is a natural person who holds an interest in an entity (public limited company, private limited company, foundation, association and the like) that exceeds 25%. This interest may consist of shares or voting rights, but also of ultimate control. The structure is examined until at least one UBO has been identified. Details of the UBO must be recorded in the UBO register. Some of these details are public. Want to know which details these are? See our article UBO Register: register by 27 March 2022 .
Partnership between BEH and the Chamber of Commerce
Economic Enforcement Agency (BEH), which is part of the Tax and Customs Administration, checks, amongst other things, whether organisations register their ultimate beneficial owners in the Chamber of Commerce’s (KvK) UBO register in a timely and correct manner. The Chamber of Commerce informs BEH if an organisation has failed to register its UBOs with the Chamber of Commerce, or has registered them incorrectly.
BEH reminder letters
What if the Chamber of Commerce has informed the BEH that your company has not yet registered its UBO? The BEH will then send a letter to remind you of your obligation. If you register the UBO correctly following this reminder, you will avoid a fine. The letter will specify a two-week deadline for compliance. If the UBO has still not been registered by the end of this period, BEH will contact you by telephone to urge you to register the UBO without further delay.
No UBO has been registered – what now?
If, despite BEH’s reminders, the UBOs have not been registered correctly and in full, you are in breach of the regulations. As we have already mentioned wrote It classifies the failure to register UBOs as an economic offence. BEH may impose a fine of up to €22,500 or a periodic penalty payment for which there is no upper limit.
Despite the high fines, by no means have all those required to register submitted their UBO information. Everyone has their own reasons for this. Many believe that the public nature of the register constitutes a violation of their rights. A case on this matter is currently pending before the Court of Justice of the European Union (Case C-601/20).