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HOLLAND QUAESTOR: TRUST OFFICES ON THE MOVE

Holland Quaestor (HQ) is the association of Dutch trust offices. Twenty-five of the approximately 120 trust offices are members of HQ. They represent about 75% of the sector’s market share. The aim of the association is to improve the quality and professionalism of its members and to promote the interests of its members. HQ represents its members, not the sector.

Members of HQ help businesses comply with legislation, manage investment funds and perform capital market activities and support in establishing local branches of overseas companies. Advice and services related only to taxation aspects are no longer provided. The value that members add is more than just the financial added value of the sector, which amounts to at least €3 billion a year.

Governments and parliaments have been making tax treaties with countries around the world for decades, with the aim of creating attractive development opportunities for businesses in the Netherlands. A set of factors comes into play here including:

– a stable environment socially and politically
– a solid and fair legal system
– a steady and transparent business tax climate
– an extensive and advanced financial infrastructure, served by a full range of banks, tax consultants, accountants, notaries, lawyers and trust offices
– effective protection for Dutch investments in other countries

It is also important to protect Dutch investments in other countries.National and international discussions have taken place about the use and abuse of tax treaties by multinationals and trust offices. To that end, the OECD (the BEPS programme) and the EU (including the Anti-Tax Avoidance Directive) have taken appropriate measures. HQ has embraced these measures from the very beginning, and it has never lobbied for amendments. The trust companies—and certainly the members of HQ—take no part in the discussion on whether tax optimisation is acceptable. Indeed, the trust sector has never sat at the table during consultations on this subject between the Ministry of Finance and tax lawyers of companies, business organisations and consultancies.

Regulation
In the Netherlands, a predecessor of HQ and others asked for regulation for the trust sector. This request resulted in the Act on the Supervision of Trust Offices (Wtt). Initially, supervision was limited, and HQ repeatedly made this clear, including in a parliamentary hearing in September 2016. Fortunately, supervision of the sector has intensified in recent years. A revision of the Wtt is now in progress. HQ supports this revision, albeit with a few observations of a practical nature.

Members of HQ are naturally obliged to refrain from illegal activities such as the abusive tax sheltering of wealth, tax evasion, laundering, terrorism financing and matters relating to sectors and individuals on sanction lists. There can never be a discussion about this.
Trust offices operate in a chain of players: tax consultants (those who draw up tax structures with their clients), banks, notaries, lawyers and accountants. Legislature and supervisory authorities form the framework. This means that each player, not just trust offices, are subject to any changes to the existing regulatory system, but perhaps none more so than the legislature and tax consultants.

The direction of HQ
Shortly after the summer of 2016, the strategy of HQ changed drastically when a chairman from outside the trust sector was appointed. The direction of HQ now focuses almost entirely on improving the quality and professionalism of its members and – to a lesser extent – safeguarding the interests of its members.

Support within the association for this change of direction is considerable, even though it places great demands on our members regarding both input during development and compliance stages. Training activities have been extended. Guidelines have been established (with more to come), which all members must follow. Training requirements exist for board members, and other roles have been strengthened. Workshops take place to help the members introduce all requirements. Organisations that want to provide training and education must first go through an accreditation procedure. The Articles of Association and Internal Rules & Regulations have also been amended to include a wider range of instruments to penalise breaches of the rules.

The quality inspection mark and the Stichting AQTO
In 2015, the independent Stichting AQTO was set up (www.aqto.nl). AQTO has developed a quality inspection mark, which it administers and awards by visiting and appraising HQ members. In 2016, the first round of visits was completed. Since 1 January 2017, HQ members are obliged to have this quality mark, in addition to a Wtt licence issued by the Dutch Central Bank. Around 30% of members were not awarded the quality mark and are, therefore, no longer members of HQ.

In the summer of 2016, the quality inspection mark was tightened up: the number of conditional requirements was increased (in place of the ‘comply or explain principle’). The number of requirements was increased and several were tightened up. The standardisation of awarding the quality inspection mark was raised substantially. The guidelines in the paragraph above serve as an assessment framework for visits to offices.
The strategy and the activities of HQ and Stichting AQTO have been called positive on several occasions by the supervisory authority (i.e. the Dutch Central Bank), which keeps a close eye on the activities of both organisations. Of course, the members of HQ must live up to the requirements issued by HQ and AQTO. Given the massive impact of these requirements, this is a process that will take some time.

The focus of HQ remains on developing and implementing directives, reinforcing training opportunities and organising meetings where professionals can work on their continuing education and be rewarded with recognised PE points.

What has HQ still to do?

– The second round of visits by Stichting AQTO of HQ members is now in progress.
– A second round of training for Trust Officer started at the University of Maastricht in the autumn of 2017; the third round starts in September 2018.
– The number of guidelines for members has been increased. These relate to ‘Systematic Risk Analysis (SIRA)’, ‘Data protection, including the legal requirements for the protection of personal data’, and ‘The civic integrity of tax structures’.

Finally: We know we still have a way to go, but we’ve made excellent progress so far. It’s full steam ahead for HQ and its members!