We are often asked whether a Dutch tax resident needs to show their savings if they are in foreign accounts. Will they be found? The best answer is the story below.
But first, a little about legislation
By law, you are required to show all your savings to the world. The only exception is made for owners of 30% tax: they can not declare foreign accounts only if they choose partial tax residency. Learn more about 30% taxiing and its benefits in our webinar. Link here.
And how does the tax office find out about accounts abroad?
Taxes in most countries are on the alert. In 2014, the G2014 countries adopted a common standard for automatic exchange of information (Common Reporting Standard - CRS). In the same year, the Organization for Economic Development and Cooperation (OECD) approved it. Soon, in October 51, 2020 jurisdictions signed the Automatic Information Exchange Agreement (CRS MCAA). In 105, 2021 countries have already exchanged data, and in 4 another XNUMX countries have joined the СRS.
- What information do countries exchange? Individual accounts (name, address, tax jurisdiction, account currency, current balance), as well as the accounts of companies, trusts and private foundations. It must be provided by banks, brokers, investment structures, and some types of insurance companies.
It is logical to assume that the majority of those reading these lines are interested in whether such countries as Russia, Ukraine, Belarus, Kazakhstan and Georgia have joined the СRS.
We satisfy your curiosity. In addition to the EU countries, Great Britain, Japan, Hong Kong, Israel, Turkey, there is Russia in the list of those who have joined the CRS. Kazakhstan joined this year. Ukraine plans from 2023. Georgia - from 2024. Belarus has no plans yet.
Keep in mind that with those countries that have not yet joined with CRS, the exchange of tax information also takes place, but only on request.
Shake it on the mustache
More and more countries are joining the agreement on the automatic exchange of information. Therefore, if a country has not joined now, then it can do so in the very near future. We highly recommend not hiding accounts in other countries, hoping for a Russian maybe. Otherwise, what happened to one of the inhabitants of the Netherlands may await you.
Here comes the story
A suspended sentence, 160 hours of community service and a € 200.000 fine, would you like to?
The prosecutor's office in Rotterdam accused the woman of providing incomplete information in her tax returns for 2011-2015. At the trial, the following information was announced: the lady agreed with her ex-husband that after the divorce he would share 5 million euros with her. From this amount, she will receive 1 million euros in cash. The contract was oral, the information was not included in the divorce agreement (echtscheidingsconvenant). There was nothing about content obligations at all.
The day after the signing of this agreement, 1 million euros (the amount was converted into Swiss francs) was transferred to her account in a Swiss bank. A woman could be envied if it happened before countries thought of exchanging information. But not in our time.
The Netherlands joined the agreement on automatic data exchange in 2017, and Switzerland in 2018. But they can exchange information for previous periods as well. And the tax authorities do not eat their bread in vain - they found the million that "went to the left" and asked to explain.
The woman began to say that the money was not at all from her husband, but from the sale of works of art and antiques. However, she could not confirm her words. As a result, the court ruled: the woman deliberately hid her assets in Switzerland, actually abandoned her bank accounts in Spain (and this was dug out). In addition, in 2015, the woman closed her Swiss bank account and then transferred the balance to her bank account in Singapore.
Thus, the court considered that our heroine wanted to hide the money from the tax authorities. In addition, the woman refused to cooperate - she did not tell the investigation in any way in which countries to look for accounts.
The judge's verdict: a four-month suspended sentence. In addition, the court sentenced the woman to 160 hours of community service and a € 200.000 fine.
Publication Date: 09.12.2021
