If the company is foreign, the financial statements must be deposed in the origin country and to the Trade Register
of the Chamber of Commerce where the main Dutch office is located. In the case you have a business elsewhere and you have opened a branch of it in the Netherlands, the law usually does not require financial statements, because the branch does not have legal autonomy from the mother company.
Audit in the Netherlands for small, medium or large company
Depending on the size of the company (micro, small, medium or large), the publication, consolidation and audit requirements differ. The size of the company is determined by reference to the value of the balance sheet assets, the net turnover and the number of employees. In order to be considered a micro company the total value of assets of a business must be less than 350 000 euro and the company can have up to 9 employees. The net turnover for a company which is considered small can be of maximum 12 million euros and the enterprise can hire up to 50 persons.
The laws for audit in the Netherlands
stipulate that only medium and large companies must create an annual financial report
audited by an independent, qualified and registered auditor, from a Dutch accounting firm
. Since 2016, the thresholds for the classification of the companies in small, medium and large have increased thus making many previous large companies to be considered medium or small by the new law. Since the requirements for smaller companies are lighter this represented an advantage in terms of accounting for many business owners. As such a small company will only have to provide and abridged balance sheet and abridged explanatory notes. Medium companies must file a balance sheet abridged to some extent, an abridged profit and loss account, detailed explanatory notes and an annual report.
This auditor is chosen and approved either by the general shareholders meeting, the supervisory board or the managing board. The supervisory or managing boards must first read the auditor’s report and then approve the financials statements.
What are the audit requirements in the Netherlands?
The auditor’s report must verify if the following conditions are met:
- if the financial statements contain information in accordance with the principles of accounting firms in the Netherlands
- if the financial statements contains accurate information about the financial situation for the respective year
- if the management board’s report respects the legal requirements
- if the report includes any important additional information.
Starting with the 11th of December 2012, according to the accounting law in the Netherlands
adopted by the First Chamber of the Dutch Parliament, an accountant firm in the Netherlands may provide audit services
to a company or any type of corporate entity for no more than 8 consecutive years.
Since January 2016 the EU Accounting Implementation Act has introduced several modifications in terms of simplification and modernization of the financial reports and their filing procedure. The annual accounts must be prepared at latest in the fifth month after the end of the financial year and filed with the Dutch Trade Register within maximum 12 months. A delay is punishable by a fine of EUR 20,250 and can attract as well the dissolution of the company.
The same law also states that audit firms must separate audit and advisory services, and therefore they can’t provide both audit and advisory services to a corporate entity.
Public interest organisations must give a prior notification to the Authority for Financial Markets (AFM) about their intention to appoint an accounting firm for performing audits.