OSE Europe/Foundation Laws
The OSE Europe Foundation will be under the following laws, taken from the Comparative Highlights of Foundation Laws 2011
The Netherlands is chosen as a country for the foundation.
- Purpose of a foundation
Both public and private benefit purposes are permitted.
- Is minimum capital required?
No
- Is state approval required?
No, but registration
- Is registration required?
Yes (Register at Chamber of Commerce)
- Is register publicly available?
Yes
- Is the foundation allowed to spend down its capital?
Yes
- Are economic activities (related/unrelated to the public-benefit purpose) permitted?
Yes. Commercial activities are allowed provided they are within the objectives of the foundation, but are taxed.
- Is governing board required?
Yes
- Minimum number of Governing Board members?
5
- Is supervisory board mandatory?
No
- Is remuneration of board members allowed in civil and/or tax law? If yes, what are the limits?
Yes, remuneration is allowed when this is in accordance with the statutory provisions of the foundation. In the tax law, remuneration of board members is allowed. If a foundation wants to be qualified as a charitable institution, remuneration of board members is only allowed for reimbursement of expenses, carrying out work, or attending meetings.
- Are there rules against conflict of interest of board members?
No, but civil law prohibits the conflict of interest of a director for the private or public limited company (BV or NV). In Dutch literature it is argued that this prohibition also applies to foundations and associations.
- What are requirements with regard to reporting and accountability?
The board has the duty to maintain financial records (a balance sheet and a statement of revenues and expenditures of the foundation). These records have to be kept for 7 years. In principle every commercial foundation has to publish its annual accounts within 8 days after they are approved. A commercial foundation whose net turnover totals less than €8.8 million and whose assets do not exceed the value of €4.4 million over 2 consecutive years could be exempted from the obligatory publication of accounts.
- Do annual reports and/or accounts of foundations need to be made publically available?
Yes, but only for commercial foundations. Accounts must be published with limited exceptions based on size of annual turnover.
- Is external audit required by law?
Yes, for medium or large entities.
- Which body is the Supervisory structure?
Public Prosecutor’s Office and the District Court/arrondissementsrechtsbank.
- What is the extent of state supervision?
The supervision will only take place on request of interested parties. Only upon request will the District Court undertake action in the interest of the foundation. Interested parties can ask for a decision to change the statutes, dismiss directors or dissolve the foundation. The District Court is the competent authority to take such action in the interest of the foundation. Dissolution is the last resort.
- Can a foundation’s assets revert back to private ownership in case of dissolution?
This depends on the foundation's statutory provisions. If nothing is provided in its statutes, the assets will go to the state which will use them as far as possible for the purpose of the foundation.
- Is there a maximum that can be spent on office/ Amount administration costs in civil and/or tax law?
No, but administration costs should be reasonable for the foundation to qualify as charitable and in line with its statutes.
- Does civil and/or tax law require a foundation to spend its income, or a certain amount of its income, within a certain period of time (e.g. within the next financial year)?
No
- Does civil and/or tax law require a foundation to spend a certain percentage of its overall assets?
No
- What are the requirements to receive tax exemptions?
In order to receive tax exemptions a foundation has to be officially qualified as a charity by the Dutch tax authorities (specific criteria include: no intention to make a profit and a demonstrably charitable character, reasonable fundraising and administration costs, transparent bookkeeping, and a clear policy plan).
- Is the exemption automatic or is special recognition from the tax authority needed?
Special recognition needed
- Do activities abroad put the tax-exempt status of a public-benefit foundation at risk?
No
- Do public-benefit foundations pay income tax on grants and donations?
No
- Are grants/donations subject to gift and in-heritance tax?
No, for recognised public-benefit organisations.
- Is income from asset administration taxed?
No, unless the investment qualifies as business activity.
- Is majority shareholding in companies permitted?
Yes, although the Dutch tax authorities are of the opinion that a major shareholding in a commercial entity restricts the foundation’s eligibility to obtain the status of an ANBI (Institution for General Benefit).
- Is majority shareholding in companies taxed?
No, provided that the foundation is not directly involved with the management of the company.
- Is income from economic activities taxed?
Yes, a foundation is subject to Dutch corporate income tax (CIT) to the extent that it carries out business activities. If the activities are charitable, such as, science and educational activities, the foundation is not subject to CIT.
- Can a foreign-based foundation get the same tax benefits as a national foundation? If yes, under what conditions?
Yes
- Tax treatment of individual donors. Limit of incentive?
Donations can be deducted up to 10% of the donor’s gross income. No deduction is possible for donations below 1% of the gross income or €60 (2010).
- Amount deductible in case of a donation of €10,000
10,000
- Amount deductible in case of a donation of €100,000
10,000
- Tax treatment of corporate donors. Limit of incentive?
Donations of at least €227 can be deducted, up to a maximum of 10% of the annual income.
- Amount deductible in case of a donation of €10,000
10,000
- Amount deductible in case of a donation of €100,000
20,000
- Are donations to foreign-based public-benefit organisations tax deductible for the donor?
Yes, but receiving organisation must be registered in the Netherlands and meet certain conditions.