Internal Revenue Service, Money Laundering and Unusual Transactions

According to competent sources, money is regularly laundered in the Netherlands and so-called unusual monetary transactions are recorded. First of all, this is connected with criminal money or accounts for the legalization of money earned "in black". This situation does not suit the government of the country and to combat it, a law on notification of unusual transactions was introduced, the so-called MOT - Wet Melding Ongebruikelijke Transacties. However, now tax inspections will become even tougher - each payment from 10 euros will be checked. This means that now you need to be more careful when buying furniture, a house, a car, and so on, because these costs may fall under the money laundering law. 

Unusual transaction notification

As mentioned above, the Netherlands has an unusual transaction notification (MOT) law and an unusual transaction notification center located in Zutemeer. The purpose of this center is to collect, store, process and analyze information about transactions that are out of the ordinary picture. The center maintains contact with foreign organizations that have similar functions, and also prepares an annual report. Operations that appear suspicious are immediately referred to the appropriate investigative services. The Unusual Transactions Notice Act also applies to independent professionals, including accountants, tax consultants, notaries and lawyers.

What transactions are considered unusual?

According to WWFT, the Money Laundering and Terrorist Financing Prevention Act, a transaction is unusual if it meets one or more of the following criteria:

• Transactions with banks involved in money laundering or terrorist financing.
• Transactions with banks or individuals located in countries or territories identified by the Minister of Finance and the Minister of Justice as having an unacceptable risk of money laundering or terrorist financing.
• Cash transactions in banks in the amount of 10 euros or more, when it comes to exchanging cash from one currency to another or exchanging small notes for large ones.
• Cash transactions at bureaux de change or foreign exchange offices in the amount of EUR 10 or more, if funds are provided in the form of cash, checks or by credit / debit card, when money is credited to the account through cash or checks.
• Using a credit card for transactions of € 10 or more with a subsidiary in the Netherlands.
• Cash deposit to a credit card in the amount of EUR 10 or more.
• Depositing coins, banknotes or other valuables into the casino for € 10 or more.
• Cash transactions in casinos for the amount of 10 euros or more.
• Selling chips worth € 10 or more to a customer in a casino by depositing checks or paying in foreign currency.
• Purchase of items of great value, such as vehicles, ships, art, antiques, precious stones, precious metals, jewelry or jewelry, paid in full or in part in cash when the amount payable in cash is 20 euros or more.
• Payment for consultant services in the amount of EUR 10 or more, payable in cash to the professionals themselves or through their intermediary, in cash, bearer checks or similar means of payment.

Unusual transaction notification. Who is required to report?

• Financial service providers such as banks, insurers, investment institutions, money transfer offices, credit card companies, and casinos.
• Sellers of valuable items such as cars, art and antiques, ships; auction houses and jewelers.
• Representatives of certain professions such as lawyers, notaries, accountants, tax consultants and brokers.

Information to be provided when reporting an unusual transaction:

• the identity of the client;
• type and number of identity card;
• the nature, time and place of the transaction;
• transaction amount;
• the origin and destination of the money or other valuables involved in the transaction;
• circumstances that make the transaction unusual.

As for small and medium-sized businesses

On July 10, 2018, the rules were tightened even more: when concluding transactions for 10 or more, all entrepreneurs and sellers must check the buyer's passport, find out if it is really the buyer's passport, and keep all copies for five years.

Anti-money laundering plans for 2020 and 2021 

On July 1, 2019, the government presented a plan to combat money laundering, here are some points from this plan:

• Controlling cryptocurrency sellers from 2020 (bitcoins and altcoins).
• From 2020, it is planned to achieve greater transparency in relation to legal entities and associations. This applies, for example, to the provision of lists of ultimate beneficiaries of companies.
• From 2021, a cash limit of € 3000 will be introduced for sellers.
• From 2021, the legal framework for the BES islands (Bonaire, (Sant) Eustatius and Saba) will be tightened.
• The Cabinet of Ministers also wants to initiate the abolition of 500 euro notes in Europe.

All this makes you think about doing business, and just about expensive purchases using cash. Be careful with what you buy and sell so you don't get caught up in the unusual transaction notification law.