Accounting Directive Implementation Act entered into effect

On 1 November 2015 the Accounting Directive Implementation Act entered into effect. This legislation implements Directive 2013/34/EU in Dutch law. The most important changes under this Act are higher thresholds for determining the “size” of legal entities (and hence the applicable rules regarding annual accounts) and shorter deadlines for the filing of annual accounts and annual reports.

Thresholds for “size” of legal entities
The size of a legal entity in terms of (a) the value of its assets according to its balance sheet, (b) its turnover and (c) the number of employees determines the rules on annual accounts applicable to that entity. “Small” and “medium-sized” entities are subject to more lenient rules: for example, a small entity is only required to draw up a balance sheet with accompanying explanatory notes and is not required to have its annual accounts audited. Under the new Act, the asset-value and turnover thresholds have been raised and as a result a larger number of entities will qualify as small or medium-sized and benefit from the more lenient rules. In the case of small entities, the asset-value threshold has been increased to EUR 6 million and the turnover threshold to EUR 12 million. The corresponding thresholds for medium-sized entities have been increased to EUR 20 million and EUR 40 million, respectively. The threshold for employees has not been changed.

Latest filing deadline annual accounts
Under the new rules, the latest date for filing of the annual accounts with the Trade Register is 12 months (instead of 13 months) following the end of the relevant financial year. There is no change in the standard deadline for drawing up the annual accounts and submitting them for adoption by the relevant corporate body: what has changed is that the maximum period for which an extension can be granted has been shortened by one month. It remains the case that if the annual accounts are not adopted within two months following the deadline for submission (taking into account an extension, if applicable), they must be filed in draft form with the Trade Register. The rules for the different types of entities starting 1 November can be summarised as follows: The annual accounts of BVs and NVs (except for most listed NVs, see below) must be drawn up and submitted for adoption within five months following the end of the financial year, with a maximum extension period of five months (instead of six). In the case of associations, foundations, cooperatives and mutual insurance associations, the standard deadline is six months with a maximum extension period of four months (instead of five). It should be noted that in most cases, the deadline for a listed NV is a non-extendable term of four months. This rule remains unchanged.

Date of applicability of new rules
The Act applies to annual accounts and annual reports for financial years commencing on or after 1 January 2016, also if the articles of association of the relevant legal entity have not yet been amended to incorporate the new extension period. However, legal entities can voluntarily opt to apply the new rules where the relevant financial year has commenced prior to that date.

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