Taxing exercise
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The formation of Rabobank International, the merger agreement with
Robeco, and the rapid expansion in the bank's foreign network are profound
stages in a strategy of global metamorphosis. Behind our new name, our new
partner, and the dynamic proliferation of new foreign offices, however, lie
complex fiscal challenges as well.The bank's formal tax structure - for
regulatory purposes - has to be just as dynamic as the organization itself.
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The grouping of this expanding network
into a coherent and optimal tax regime is
a crucial task that is being handled by the
tax department based in Utrecht.
Employing a staff of 28, the department
forms part of the legal and tax division
headed by Dick Schijf and falls under the
day-to-day management of Jan van
Veenendaal. Like many of his colleagues
in this department, Van Veenendaal came
to the bank after a stint as a corporate tax
inspector with the Ministry of Finance. He
is convinced that such experience is
particularly important in the Dutch
context because the fiscal terms and
conditions of under which the new
multinational structure will operate are
negotiated with (rather than imposed by)
the tax inspectorate.
CLEAR FRAMEWORKS
'We have to work under a legal and fiscal
framework of crystalline clarity at all
times,' says van Veenendaal. 'Our most
fundamental task is to constantly update
this framework - which inevitably requires
a continuous dialogue with governmental
authorities. Needless to say, it helps to
know how they think, in addition to
clearly understanding of the internal and
external priorities of the bank itself.'
COMPLEX TASK
Given the current spurt of growth and
change, this complex task is now
occupying a great deal of the department's
time. Yet its day-to-day brief is much
wider. It is also responsible for managing
fiscal matters on behalf of all the affiliated
banks, plus subsidiaries like De Lage
Landen and Nedship, for advising and
facilitating the structuring of individual
deals, and for keeping all segments of the
organization abreast of important pending
legislative change.
DYNAMIC ENVIRONMENT
For example, the Dutch government has
recently proposed important adjustments
in the tax treatment of multinationals, as
well as changes concerning the obligations
of substantial shareholders in Dutch
companies. The former adjustment is
aimed at making the Netherlands a more
attractive environment for multinationals -
and it may offer opportunities for the
bank's own fiscal position as well. The
latter changes, once finalized, will modify
the regime under which many private
banking clients now work and will thus
create opportunities to structure new
products and services for those clients.
'The tax environment, like the bank itself,
is very dynamic these days,' says Van
Veenendaal. 'It is our job to insure that the
bank makes the best of this dynamism.'
FISCAL OPTIMIZATION
As the bank grows outside the
Netherlands, its transactions are
increasingly multinational. Obviously,
when a new office is opened abroad, it has
already been carefully structured from a
tax point of view. Once the new entity is
in place, it is the job of the tax department
to insure its fiscal optimization on a
continuing basis, in cooperation with local
advisers, not only in terms of its structure
with respect to local rulings but also in
terms of its product offerings and its
synergy with the bank network as a
whole.
EEN ZWARE
BELASTING
Juridische en Fiscale Zaken
houdt zich, naast het geven
van adviezen over deals met klanten en het
managen van de fiscale aspecten van de
aangesloten banken en de deelnemingen,
ook bezig met het optimaliseren van de fiscale
structuur van Rabobank International. Voor
iedere nieuwe buitenlandse vestiging wordt
uitgebreid bekeken hoe deze gestructureerd
moet worden. Ook de door de Nederlandse
overheid voorgestelde wijzigingen ten
aanzien van de fiscale behandeling van
multinationals alsook voor de verplichtingen
van aandeelhouders met substantiële
pakketten worden doorgelicht. Daarbij wordt
scherp gekeken naar de mogelijkheden die
dit biedt voor onze klanten en onze bank.
Jan van Veenendaal - building fiscal
optimization and support for the network
ESSENTIAL COORDINATION
Legal and fiscal components of individual
deals are becoming more important than
ever before. Sometimes, indeed, these
issues are the motive force: more and
more, deals and products have profoundly
tax driven qualities. The tax department
can generate increments of added value
and also help in the avoidance of punishing
mistakes. In the case of a complex
structured financing for a corporate cliënt,
for example, the account manager, often
together with representatives of the cliënt,
almost always coordinate their work with
the tax department at every stage from
inception to execution. The common aim
is to guarantee that there is a solid fiscal
foundation underlying the ultimate result.
GOOD RELATIONS
'Obviously, there is every incentive to
organize things for a cliënt in the most
creative and beneficial way,' remarks Van
Veenendaal. 'Nevertheless, everything has
to pass muster as well. We consult with
our friends on the other side of the
regulatory fence to get advance rulings
whenever in doubt. Obviously, good
relations with the tax authorities are
crucial for our long-term success. As with
everything - effectiveness usually lies in
judgment and striking the right balance.'
Nothing could be more important to the
bank's future success than consistently
getting this balance right. 'As you can see,
we have a great many important issues on
our plate,' Van Veenendaal says. 'As our
own time becomes more precious, we try
to delegate responsibility, and to
coordinate as closely as possible with
every division in the bank.' Van
Veenendaal is now planning to set up
dedicated teams with special responsibility
for generating detailed recommendations
for the fiscal strategy of each new division
within Rabobank International.