Dutch pension funds have “no clue” of their true tax burden and should begin mapping their tax liabilities by seeking clarity about their fiscal role, tasks and responsibilities, according to Roelof Goudswaard, fiscal head at the €377bn pensions provider APG.
Speaking during the Pensioenforum in Scheveningen, Goudswaard estimated that Dutch pension funds’ tax liabilities currently stood at no less than 2% of their assets.
He specifically suggested that schemes check which party is liable for tax on any outsourced activity.
During his presentation, Goudswaard referred to the general exemption from VAT on pensions administration, which is to expire on 1 January 2015, and noted that the Inland Revenue had intensified its monitoring.
He also said several pension funds had failed to register with the Inland Revenue for VAT, and advised them to get in touch with the tax man to prevent getting fined.
APG’s director of fiscal affairs said he expected the Inland Revenue to evolve into a third supervisor for pension funds, in addition to watchdog De Nederlandsche Bank (DNB) and the Financial Markets Authority (AFM).
He also predicted that the tax rules would be increasingly set by the EU, as well as by the US, citing the FATCA legislation, which makes it mandatory for Dutch pension funds to report about their US clients to the US tax authorities.
Also during the Pensioenforum, Marco Folpmers, professor of financial risk at Tilburg University, criticised the lack of guidance from the Ministry of Social Affairs in the national debate over the future of the pensions system.
In his opinion, state secretary Jetta Klijnsma has failed to produce a vision of the desired sustainable set-up, and the direction of the current dialogue is unclear, as every citizen and organisation can have a say, while no subject of off-limits.
“This carries the risk of polarisation and failure, and also includes the risk of outcomes that are at odds with the aim of deploying pension assets for pension goals,” he said.
Folpmer’s opinion about the ministry’s lack of guidance was echoed by pensions expert Emilie Schols, who said the pensions debate would need to be “forced through” within three months.
She suggested Social Affairs did have a vision of the future pensions system – it would merely carry on with its initial plans after the national dialogue had finished.