Jointly together with you, I would like to study and explore how rational Dutch GAAP and Dutch tax system in this column.
Recently there was news from France that she would start to charge new rate of 75% in private income tax calculation towards all residence who have more than 1 million taxable incomes as from 2013.
And also, such news was provided that in Russia everyone can use the same income tax calculation rate, that is, 13%.
I can imagine that you are quite familiar with the deviation of income tax rate from country to country.
Then, how is in the Netherlands?
As you know, Japan Agribio has been producing Monthly / Annual Financial Statements for group consolidation purpose after FY 2010 under the accounting rule of Dutch GAAP.
I perceive that one of the remarkable feature of Dutch GAAP is the fact that it is super conservative.
There are several good examples for you to understand how Dutch GAAP is super conservative.
|Example 1 :
Provision for retirement allowance payment
This is not so big surprise, since there are already so many companies who are booking this provision in her B/S.
|Example 2 :
Provision for possible paid-leave payment
Although Japan Agribio does not have such habits at all to purchase remaining un-used paid leaves from employees, however, we are obliged to book such provision to show that even in the worst case we are financially OK.
|Example 3 :
Provision for timing difference monthly salary payment
Like other Japanese companies, the monthly salary payment date of Japan Agribio is 25th in every month, normally.
However, monthly salary payment on 25th can cover the working hours starting from 11th in previous month through 10th in current month.
It means that there is time difference of 15 days between salary payment calculation closing date on 10th and actual salary payment date of 25th.
Since Dutch GAAP is quite super conservative, we have obligation to book provision for such 15 days salary payment (half month).
Do you think it is quite conservative?
Dutch Tax rule
Dutch tax rule is also quite rational.
Good example is individual income tax rate.
Generally speaking it is 35% whatever your income is.
Of course you have to make individual income tax return by yourself, and I believe that is the reason and background why there are so many Dutch oriented tax advising companies and audit companies in the world.
Withholding tax rule is also quite rational.
As you know, as from January 2012, it is not necessary for you to pay any withholding tax in case of dividend payment between Japan and the NL under the new tax treaty.
With Best Regards,