The purpose of the Amending Directive is to simplify and improve the existing directives, increase their efficiency and reinforce the European Union’s (EU) international competitive strength. The Amending Directive must be implemented in Dutch law by 1 July 2012.

Prospectus Directive The main amendments to the Prospectus Directive are the following:
•	the Prospectus Directive does not apply to:
	-	an offer of securities with a total consideration in the EU of less than EUR 5 million (currently EUR 2.5 million) calculated over a period of 12 months;
-	-	an offer of specific non-equity securities issued by credit institutions with a total consideration in the EU of less than EUR 75 million (currently EUR 50 million) calculated over a period of 12 months.
•	threshold values for exemptions from the requirement to publish a prospectus are adjusted as follows:
-	-	an offer of securities to fewer than 150 persons (currently 100) per Member State;
-	-	an offer of securities that can only be purchased for a consideration of at least EUR 100,000 per investor (currently EUR 50,000)
-	-	an offer of securities with a denomination per unit of at least EUR 100,000 (currently EUR 50,000).
•	no obligation to publish a prospectus exists in respect of share schemes for employees
-	-	an offer of securities by the employer to directors and employees, provided that an information document is made available instead of a prospectus (currently an additional requirement is in place specifying that the employer’s securities must have been admitted to trading on a regulated market).
•	prospectus contents
-	-	introduction of the term “key information”, meaning essential and appropriately structured information to enable investors to understand the nature and the risks of the securities being offered to them. This key information is to be included in the prospectus summary.
Transparency Directive The main amendment to the Transparency Directive is the following:
•	threshold values are adjusted in respect of:
-	-	exemption from specific disclosure obligations (such as publication of the semi-annual figures) upon the issue of bonds with a denomination per unit of at least EUR 100,000 (currently EUR 50,000);
-	-	flexibility as regards the location of a meeting of bond holders upon the issue of bonds with a denomination per unit of at least EUR 100,000 (currently EUR 50,000).
Following implementation of the Amendment Directive in the Netherlands, issuing institutions may only continue to use the aforementioned lighter transparency regime for bonds issued with a denomination per unit of at least EUR 50,000 - during the term of those bonds - if the bonds were issued and admitted to a regulated market before 31 December 2010.

In the case referred to above, the question came up whether a resolution adopted by Air France-KLM to reserve a large share of KLM’s profits was contrary to the reasonableness and fairness to be respected with regard to minority shareholders. Air France issued a public exchange offer on ordinary KLM shares In April, 2004. However, a number of shareholders refused the offer and continued to hold shares in KLM. Only 0.9% of the ordinary shares has remained in the hands of minority shareholders after the takeover. KLM’s Articles of Association provide that, as priority shareholder, Air France-KLM can resolve to reserve all or part of the profits. In 2008, Air France-KLM resolved to reserve 90.7% of KLM’s profits for the 2007/2008 financial year. According to the VEB, a Dutch stockholders’ association, which acted on behalf of the collective minority shareholders, with its resolution Air France-KLM took insufficient account of the minority shareholders’ interest in a reasonable dividend. With regard to a minority shareholder in particular, the entitlement to dividend is extremely important and one of the few rights retained by holders of minority shares in a company that is not or no longer listed. After all, such minority shareholders have few if any options for selling their shares. KLM shares are no longer listed. In order to retain its international landing rights, the majority of KLM shares - i.e. de facto control - must also be held by a Dutch legal entity. This is why part of the KLM shares are held by two Dutch trust offices and Air France-KLM holds only 49% of the capital in KLM for its own account. This also makes a buy-out impossible.

With its judgment, the Amsterdam District Court confirmed that from the perspective of return on investment, minority shareholders must often make do with the dividend on shares. However, this does not mean that Air France-KLM has a duty on the basis of reasonableness and fairness to resolve to distribute a reasonable dividend. That duty depends on the circumstances of the individual case, regarding which the District Court noted that Air France-KLM has a “wide margin of discretion”. In this specific case, the District Court determined on the basis of an extensive explanation of the financial positions of KLM and Air France-KLM that the resolution to reserve was justified and that the reservation did not disproportionately affect the interests of the minority shareholders. The VEB has indicated that it finds the judgment unacceptable in principle and has meanwhile lodged an appeal. To be continued.

Education organisations are increasingly taking part in various administrative networks and collaborative partnerships, e.g. with the business sector, housing corporations or other social organisations. Sometimes that participation is even necessary for the purpose of funding or subsidy. Examples include cooperation in the area of special education, community schools or special subsidies within the context of knowledge valorisation. Being suddenly confronted with the bankruptcy of a partner in a collaboration can result in awkward and unworkable situations if no provisions have been made for this eventuality. The bankruptcy of one of the parties does not automatically terminate the cooperation agreement, while continuing performance of the agreement has become uncertain and termination might in fact be the best option. The cooperation agreement can only be terminated if the receiver decides it is not desirable not to continue it.

A lack of clarity in such situations can be avoided by including relevant provisions in the cooperation agreement. Arrangements can also be agreed regarding the reciprocal provision of information and financial accounting in order to keep an eye on potential risks.

The scheme in a nutshell
The expense allowance scheme entails that an employer may spend 1.4% of its total taxable payroll free of tax on employee reimbursements and disbursements. This ‘discretionary margin’ may be used, for example, for Christmas hampers, staff parties and discounts on company products. Should an employer exceed the discretionary margin, a final levy of 80% is payable on the amount exceeding the discretionary margin.
Certain specifically identified allowances (the specified exemptions), such as business travel expenses and study costs, can be reimbursed tax-free and provided without any impact on the discretionary margin.
For workplace related provisions, for instance, such as the PC, the land line and consumptions that are not part of a meal, a ‘zero valuation’ applies. Allowances valued at zero leave the discretionary margin of 1.4% unaffected.

Employers that have not yet introduced the scheme
As things stand, all employers in the Netherlands are required to apply the expense allowance scheme as from 1 January 2014. In this respect, we advise any employers that have not yet applied the scheme to start taking a critical look at their employment conditions to see whether the employee allowances/disbursements exceed the 1.4% discretionary margin. If so, it is important - in order to avoid paying 80% in final levies on the excess amount - for the employer to identify which employment conditions can be altered for its current workforce. In addition, when preparing employment contracts for its new employees, the employer can take the upcoming expense allowance scheme into account.

Employers that have introduced the scheme as from 1 January 2011
Take care when providing certain reimbursements and disbursements
In a number of cases, the manner of reimbursement is important in determining whether the discretionary margin is affected. A few examples:

Other labour law issues
When preparing employment contracts (e.g., provisions on the expense allowance, telephone, laptop, etc.) and in the context of severance schemes, it is important to be aware of the fact that the expense allowance scheme is applied. When a severance arrangement is made, it is particularly relevant that the payment of (part of) the costs of the employee’s legal assistance is charged to the discretionary margin of 1.4%. For outplacement costs on the other hand, a specified exemption applies. This means that these costs can also be reimbursed tax-free under the expense allowance scheme.

This concludes the expense allowance scheme in a nutshell. We would be pleased to help you find solutions with regard to the introduction of the expense allowance scheme and on how to prepare for it.

Two companies in the oil seed sector, the Sofiprotéol group and the Bunge group, established a concentration in December 2009 through the transfer of shares. The NMa was not informed of this takeover until February 2010. The takeover was reported to the NMa in April 2010 and approved by that authority in May 2010.

The Dutch Competition Act requires companies to report a concentration (takeover, merger or joint venture) to the NMa if the parties involved collectively generated worldwide revenues of at least EUR 113,450,000 and at least two of the companies involved each generated revenues in the Netherlands of at least EUR 30 million.

The maximum penalty for failing to report a proposed concentration, or doing so in good time, is the higher of EUR 450,000 or 10% of the company’s revenues. The NMa imposed a penalty of EUR 677,000 on the Sofiprotéol group. The Bunge group was fined EUR 1,730,000.

Penalties imposed by virtue of the Competition Act are not included in the exclusion of deduction under the Dutch Income Tax Act 2001 and therefore may not be deducted from the profits for the calculation of corporate income tax. This also applies to other administrative penalties.

Conversely, sums paid to the State to set off advantages that were obtained contrary to the law may be deducted from the profits. However, these do not include penalties imposed by the NMa.

The District Court found on 28 December 2010 that the State’s conduct was manifestly unlawful when it reduced rates by 1.7% for the items ‘personal hygiene’ and ‘support assistance’ under the Exceptional Medical Expenses Act (AWBZ). At issue was the question of whether the State could impose an extra reduction, because more bonuses than the State had taken into account were paid out under a bonus-malus scheme. That bonus-malus scheme was linked to an earlier rate reduction of 3.5%, which could be “recouped” by meeting certain conditions. According to the court, the State made a mistake by assuming that the payments of bonuses and maluses would negate one another, and was proven wrong in practice. In the court’s opinion, the State could not invoke the complexity of the scheme or the fact that it had failed to check beforehand whether the bonus payments to be paid would fit the existing budget. These preliminary relief proceedings were initiated by ActiZ, the sector organisation for healthcare providers in rest homes, nursing homes, home care, maternity care and children’s healthcare.

Van Doorne’s healthcare group is involved in various proceedings against healthcare reductions. Just recently, Revalidatie Nederland asked Van Doorne to represent it in proceedings against a EUR 315 million reduction in the hospital sector. This sector organisation for recuperation centres believes that, by imposing this reduction, the State insufficiently considered the specific position of Dutch recuperation centres, and considers this to be one of the reasons why the reduction is manifestly unlawful.

The legislature revised the provision in 2010, significantly enhancing is practical use. The many exceptions provided by the law making it impossible to establish an agreement electronically after all have been reduced to one major exception: agreements for which the law prescribes intervention by the court, a government authority or a professional performing a public duty, such as a civil-law notary. Agreements of that type cannot be established electronically.

The legislative amendment makes it possible to establish binding agreements remotely, both in the Netherlands and elsewhere; in addition, providing general terms and conditions, mandatory spousal or partner approval of some legal acts, notification of default and interruption of a limitation period are now also possible electronically.

This legislative amendment accommodates a sector-wide wish, because many company pension funds are faced with increasingly stricter governance requirements and staffing problems. Those developments have already resulted in the liquidation of a large number of company pension funds.

Combining company pension funds offers many advantages. The multi-CPF has only one board and only one members’ council, so it requires less staff. Advantages of scale can be also be achieved in terms of administration and asset management. The pension schemes need not be identical, meaning that companies can retain their existing pension scheme when they join a multi-CPF. To safeguard the various pension schemes, separate assets can be kept in order to avoid a mingling of ‘rich’ and ‘poor’ pension schemes.

A carefully drafted accession agreement is required when a company joins a multi-CPF. In addition, the usual relevant legal documents, such as articles of association, board regulations, members’ council regulations, pension rules, etc., must be drafted when a multi-CPF is created. Van Doorne has all the necessary legal documentation in place and has a wealth of experience providing support in legal mergers. We are optimally equipped to assist you in this area.

If you are an employer or a company pension fund and want to know more about the possibilities the multi-CPF has to offer, we will be pleased to help you find the best possible solution.

A need has long existed for simple, flexible and transparent pension solutions that keep the costs of our retirement provisions under control. The PPI satisfies that need and is expected to be quickly and warmly welcomed by various companies. Certain restrictions apply, however. The pension scheme must be in the form of a defined-contribution agreement, with no coverage for pension risks such as long life, surviving dependants and disability. This means that the PPI can only function while pension is being accrued. These defined-contribution schemes merely oblige the employer to pay in the fixed premium. The retirement benefits are not fixed and depend on the investment result upon retirement.

Van Doorne will be pleased to help you design and implement solutions in this area.

A property developer applied for, and received, a building permit from the Municipality of Eindhoven. Third parties filed an objection to that permit. At the same time, a request for suspension of the permit’s operation was filed and granted in preliminary relief proceedings, as a result of which the developer could not continue the construction he had already started. That suspension was to last until six weeks after the municipality’s decision on the objection. However, the municipality took 29 weeks to make that decision. In all that time, the developer was unable to make use of the permit.

He was, of course, not amused, and claimed damages from the municipality for the - unnecessary - delay caused in the construction project. The Supreme Court’s ultimate decision was in favour of the developer. The term the municipality allowed itself was in contravention of generally accepted standards of due care to be respected with regard to interested parties. Although commencing building activities before the building permit has become irrevocable is normally for the account of the developer, the Supreme Court ruled that, in this case, that did not apply. The municipality’s argument that the decision on the objection had since become irrevocable (that decision had not been appealed) and the civil court should therefore presume its accuracy (i.e. formal legal force) was set aside by the Supreme Court. In doing so, the Supreme Court aligned with the Council of State’s Council of State’s (in Dutch) Administrative Law Division, which opined that exceeding a term is not part of the manner in which a decision on an objection is established. It therefore does not fall under the rule of formal legal force.

The Municipality of Eindhoven was ordered to pay the delay damages, totalling some € 126,000.00. This goes to show that exceeding a term can indeed be a costly affair for a municipality.

Finally: the above case must not be confused with the Wet dwangsom en beroep bij niet tijdig beslissen, which law covers penalties for administrative bodies in the event terms are exceeded in decisions on applications (Article 4:17 Dutch General Administrative Law Act (Awb)).

Businesses that are exempt from VAT, e.g. healthcare institutions, but also banks and insurance companies, cannot deduct the VAT they are charged when buying goods or services. Costs can reduced, however, by leasing the goods. When leasing, the VAT is not charged over the lump sum but over the periodic lease instalments. Paying the VAT over a period of a number of years is less expensive than paying it all at once. However, the Dutch tax administration holds the opinion that if a separate company is used for the purpose of leasing, this constitutes abuse of tax law. Many tax audits have been performed at hospitals and other institutions in recent years. Many hospitals have done away with their lease constructions under pressure from the Dutch Ministry of Finance. Unnecessarily, as it turns out. Contrary to the Dutch tax administration, the European Court of Justice finds that a business has the right to limit its VAT duty by opting for a lease construction. That lease construction must be economically realistic, however. The required lease payments may not be uncommonly low, for example. The Court of Justice ruling appears to open new options for reducing the burden of VAT.