Tax integrity risk management by banks

The public debate with respect to tax evasion or tax avoidance has significantly inceased in recent years. Banks may face severe reputational risks when their clients do not act with integrity and adhere to the banks values when managing tax afairs. Management of tax integrity risks by banking clients is therefore a key topic for banks operating in the Netherlands.

Under the Dutch Financial Supervision Act, banks operating in the Netherlands are required to take measures to guarantee the integrity of the bank and the financial sytem.

Banks need to follow a risk based approach to determine the tax integrity risks by their clients.

DNB leaves it to the bank to determine which tax integrity risks are within the tax risk appetite of the bank and therefore acceptable. Tax integrity risks have to be identified in a sytematic way and actively managed in key processes like the client due diligence and transaction monitoring processes.