As of the financial year 2016, large Dutch undertakings operating in the mining or logging industries have to report their payments to national, regional and local governments, including state-owned undertakings, on an annual and country-by-country basis. Payments to be reported include all cash and non-cash payments individually or collectively amounting to EUR 100,000 or more and relating to production entitlements, certain taxes, royalties, dividends, signature, discovery and production bonuses, licence and concession fees, and payments for infrastructure improvements. We recommend that undertakings in these industries check whether they are affected by the new rules.
Extractive industries are broadly defined. They include any activity involving the exploration, prospection, discovery, development, and extraction of:
Logging is defined as the logging of primary forest and wooded land: forest and other wooded land of native species where there is no clearly visible indication of human activity and the ecological processes are not significantly disturbed.
The following information on these payments has to be reported:
The following companies and partnerships are subject to these new reporting requirements:
Payments must be published in a separate payments report which is not subject to shareholder adoption or auditor approval. All reporting entities must file their payments report with the Trade Register. The payments report must be filed within 12 months after the end of the relevant financial year.
Subsidiaries of reporting entities are exempted from the country-by-country reporting requirements if their parent entity publishes consolidated financial statements, provided that the parent entity publishes a separate consolidated country-by-country payments report.
Entities that comply with third-country financial reporting requirements which are recognised as equivalent to the requirements of the European Accounting Directive are exempt from these new reporting requirements. However, they will have to comply with the Dutch publication requirements and file their equivalent payments report with the Trade Register.
Once the Dutch law implementing the amended EU Transparency Directive enters into force, these requirements will also apply to listed companies established elsewhere in the EU or outside the EU (third country issuers) for which the Netherlands acts as Member State of Origin. These companies will be subject to a separate regime. They will have to file the payments report with the AFM within six months after the financial year. This law has already been adopted by Dutch parliament and is expected to enter into force shortly.
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