in mind Cyprus? Do you dream of tax optimization or a life under the Cypriot sun, or another 'tax haven'? Then don't fall into the trap of 'just checking with the accountant'.
It seems logical to discuss this "big step" with your local bookkeeper or accountant first. But that's precisely where the risk lies.
What many people do not know is that accountants in Belgium have a statutory reporting obligation. And this is becoming increasingly strict. As soon as you bring up the subject of “moving,” “Cyprus,” “setting up a company abroad,” or “tax optimization,” alarm bells may (unintentionally) go off.
The Reporting Obligation: A Necessary Evil in the Fight against Money Laundering
Bookkeepers and accountants play a crucial role in the economy, but also in the fight against money laundering and terrorist financing. This fight is organized internationally and translated into legislation that compels financial professionals to report “unusual transactions” to the competent authorities. This is the core of the reporting obligation.
In Belgium, for example, this concerns “The Anti-Money Laundering Legislation,” and in the Netherlands , “The Act on the Prevention of Money Laundering and Financing of Terrorism (Wwft).” This is also known as “The Informant Obligation” and causes a great deal of tension within the profession.
See also: De Tijd: New reporting requirement makes accountants fear for their safety
The Ghost of the Tax Office: Why Your Local Accountant (Maybe) Is Afraid
The core of the problem for your local accountant is not necessarily your plan to go to Cyprus, but implications from the perspective of reporting obligations and the tax authorities.
And to be honest: the lifetime value of an accountant's client is also extremely high. They don't want to lose their clients and easy money (sorry, I said it), of course. 😉
Bookkeepers and accountants are required to follow regulations, and failure to comply can lead to serious sanctions such as:
- High Fines: Non-compliance with the Wwft or Belgian anti-money laundering legislation can result in substantial administrative fines. These can amount to hundreds of thousands of euros or even the closure of their business.
- Reputational damage: An accountant who comes under scrutiny due to a breach of the reporting obligation suffers enormous reputational damage. This can lead to the loss of clients and even the revocation of their professional license. (Or they might just become *the* person for people who hate taxes.)
- Criminal Consequences: In serious cases, failure to report money laundering activities can lead to criminal prosecution of the accountant himself.
Did you know thatif there are errors in your bookkeeping that are detrimental to the tax authorities, this can also have consequences for your accountant if they prepared your tax return? Yes, the profession is under immense pressure.
These risks create a risk-averse attitude. A complex cross-border structure, such as a tax-friendly setup via Cyprus, is a red flag for many local accountants. They fear that the structure, however legitimate it may be in Cyprus, will be viewed in the Netherlands or Belgium as 'aggressive tax planning' or even as an attempt at evasion .
The fear is not unfounded; tax authorities in both the Netherlands and Belgium are very alert to schemes perceived as tax abuse.
the Cyprus option advise against. Not because it's inherently illegal, but because:
- They do not know it: Specialized knowledge of Cypriot tax and legal structures is often lacking among all accountants in Belgium and the Netherlands.
- It is 'suspicious': The structure does not fit their 'standard picture' and may therefore fall under the subjective indicators of the reporting obligation.
- Fear of reporting: They absolutely want to avoid having to report something, with all the possible negative consequences this entails for their practice.
- Fear of scrutiny: They are afraid that such a setup will bring their practice into the sights of the tax authorities, which could lead to extensive audits of their own client base.
Finally, Cyprus is not a 'trick' but a strategic move
Don't be discouraged by fear-mongering or outdated advice from a Belgian or Dutch accountant, while people from all over the world come to enjoy the benefits of Cyprus to the fullest.
Cyprus is a full-fledged EU member state, with legal structures, low tax burdens, investment opportunities, and an attractive environment for entrepreneurs. But you have to approach it properly and legally.
Cyprus-Consult guides you from A to Z. No reporting obligation. No risk of leaks. With strategy. Still unsure? Then we always advise international tax law expert speaking
Further frequently asked questions
Does an accountant have a reporting obligation?
Yes, in both the Netherlands (via the Wwft) and Belgium (via anti-money laundering legislation), accountants, bookkeepers, and tax advisors are obliged to report unusual or suspicious transactions to the competent authorities (FIU-Netherlands or CFI in Belgium).
Does an accountant have a duty of confidentiality?
Yes, accountants are bound by professional secrecy. However, the duty to report breaches this confidentiality when there is a suspicion of money laundering or terrorist financing. In those cases, the duty to report prevails over the duty of confidentiality. Furthermore, a "tipping-off" prohibition applies, meaning they are not allowed to inform the client of a report made or intended.
Who checks the accountant for compliance with the reporting obligation?
In the Netherlands, compliance with the Wwft is monitored by supervisory bodies such as the Tax and Customs Administration, the Financial Supervision Office (BFT), and the Netherlands Authority for the Financial Markets (AFM). In Belgium, the Federal Public Service Finance (FPS Finance) and the supervisory bodies of the professional organizations (e.g., the ITAA) exercise oversight.
