What is a Dutch Foundation (Stichting)
A stichting is a Dutch legal entity that pursues a social, idealistic, or societal goal. For example, protecting endangered species, organizing cultural events, or managing a community centre.
A stichting is a legal structure with legal personality. This means it has rights and responsibilities. A foundation must pay taxes and obey the law and is liable for any debts. Your personal assets cannot usually be claimed by creditors.
Making a profit is not the aim of a foundation but it does have income. From, for example, donations, collections, inheritances, grants, and subsidies. If this income exceeds the stitching’s expenses, then you must use any ‘profit’ to achieve the foundation’s goals. You may not distribute it to the directors.
Obligation to Keep Administrative Records / File Financial Statement
A stichting will be obliged to file annual accounts if the foundation runs one or more businesses of a certain size (with a minimum of €6 million annual turnover in the last 2 financial years).
Nevertheless, in any case, a stichting must keep records and is required to retain them for 7 years.
You must keep records of income and expenses. A foundation’s income comes from its own activities, donations, and grants. The treasurer is responsible for keeping records, which include detailed financial accounts, receipts, agreements, correspondence, or digital data.
The Netherlands Tax Administration (Belastingdienst) imposes requirements on the records you keep. The following must be included:
- invoices: received invoices and copies of outgoing invoices
- transaction statements
- cash flow records
- contracts and correspondence with clients and suppliers
- time-tracking records
- travel records for car and/or public transport
- taxes, both VAT and income tax
- model agreements
- business correspondence such as letters, emails, quotations, contracts, brochures, and faxes
Liability for the Board Member(s)
According to the deed of incorporation, by default, the board is obliged to keep records of the financial position and the related administration documents. The annual report must be adopted by the board within six months after the foundation’s financial year ends. It’s advisable to main proper records, to avoid being liable as a board member due to mismanagement.
If you fail to perform your duties as a director correctly, the legal entity can hold you responsible for any damages. This is called ‘internal directorial liability’, and it can be invoked in cases of ‘serious reproach’.
How Bolder Launch can assist with your Foundation as Bookkeeper
No matter if there are any tax obligations for your Dutch foundation, it’s certainly clear that the financial record-keeping is applicable for all Dutch foundations.
Having a consistent bookkeeping service provider offers numerous advantages. Firstly, it ensures the maintenance of your foundation’s financial records in a seamless and organized manner. Secondly, by entrusting us with your accounting filings throughout the year, we can streamline the preparation of your corporate income tax return (if applicable) and financial statements at year-end. This is made possible as we already possess all the requisite invoices, bank statements, and transaction details, thus contributing to a more precise and cost-effective annual accounts process.
In light of these considerations, we strongly recommend that you consider us as your preferred service provider. Should you have any queries or require further information, please do not hesitate to reach out. Additionally, providing additional insights into the scale and nature of your foundation would enable us to customize our fee structure to better suit your Dutch foundation’s specific needs.
Should you require our assistance, we kindly ask you to inform us of the following:
- (if applicable) Profit & Loss 2024
- Occurred invoices during 2024
- Bank statements 2024
- (if applicable) Balance Sheet 2024
- (if applicable) Grant Agreement 2024
- (if applicable) Ledgers 2024
Based on your input, we will provide you with a quote for our services. Once you approve the quote, our accounting team will schedule the work (and request the final documents).
Corporate Tax
A foundation operating as a business usually pays corporate income tax. In this context, a ‘business’ is any organisation running on capital and labour for the purpose of making a profit through commercial activities and economic transactions. Any profits must be allocated to the stichting’s cause or purpose. You are exempt from corporate income tax:
- if the taxable profit in any one year does not exceed €15,000, or
- if the taxable profit in any one year is higher than €15,000, but together with the taxable profits in the 4 preceding years, exceeds €75,000.
If you meet the conditions for exemption, the Tax Authorities will grant it. No action is required on your part.
Do I Need to File a VAT Return?
Whether a foundation has to pay and charge VAT depends on its specific situation. Foundations and associations also pay VAT if the Dutch Tax and Customs Administration (Belastingdienst) considers these entities entrepreneurs. If yes, the VAT number should be activated. Whether the Stichting is subject to VAT varies from one situation to the next
Please contact us at launch@bolderlaunch.com / corporate@bolderlaunch.com or +31 76 230 0011 to learn more about how we can help expand your business in the Netherlands. We are more than happy to assist with guidance!
The publication has been prepared for general guidance on matters of interest only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No presentation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Bolder Launch B.V., its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in reliance on the information contained in this publication or for any decision based on it.
