Group exemption (groepsvrijstelling)
The group exemption of art. 2:403 DCC can, under strict conditions, exempt a group company from its own Title 9 obligations.
What does group exemption mean?
The group exemption of art. 2:403 DCC can, under strict conditions, exempt a group company from its own Title 9 obligations.
A consolidating parent must include the financial data and issue a liability declaration; other statutory conditions apply as well. The exemption is not automatically available for every subsidiary.
How does it work?
A group company need not draw up its annual accounts under Title 9 if all conditions of art. 2:403(1) DCC are met. The shareholders consent in writing after the start of the financial year and before adoption. The figures are included in consolidated annual accounts. The consolidating entity accepts joint and several liability for the debts arising from legal acts of the subsidiary. Both declarations have been filed, and the consolidated annual accounts with auditor's report and management report are available at the Business Register within six months after the balance sheet date (items b, c, f and g).
What remains is a balance sheet with at least the sum of the fixed and current assets, equity, provisions and debts, and a profit and loss account with two lines (item a). Management report, audit and filing lapse (paragraph 3).
Example
Groep BV holds all shares in Montage BV, which with € 9 million of assets, € 18 million of turnover and 70 employees is medium-sized and therefore subject to audit. For financial year 2026, Groep BV files a 403 declaration, signs the consent declaration between 1 January 2026 and adoption and consolidates Montage BV. The consolidated annual accounts 2026 with auditor's report and management report are available at the Business Register by 30 June 2027 at the latest. Montage BV then needs no audit or filing of its own. The price: Groep BV stands surety for all contractual debts of Montage BV.
In the annual accounts
Annual accounts and publication process of the group company; no balance sheet item.
Difference from the consolidation exemption
Art. 2:403 relieves the subsidiary: it need not draw up and publish full annual accounts of its own. The consolidation exemption of art. 2:408 DCC relieves the intermediate holding: it need not consolidate its part of the group if a higher-placed company does so. No liability declaration is needed for that, but the intermediate holding simply files its company annual accounts.
Common mistakes
- Considering the 403 declaration alone sufficient
- Applying the exemption without group consolidation
What to watch for
- The consent declaration applies per financial year and is signed and filed anew every year. The 403 declaration continues until it is withdrawn.
- The conditions are cumulative: if the parent's consolidated annual accounts reach the Business Register too late, the exemption does not apply that year.
- For micro and small subsidiaries the arrangement yields little: they already have no audit requirement, and a micro subsidiary publishes only an abridged balance sheet (art. 2:395a(8) DCC), a small subsidiary an abridged balance sheet with notes (art. 2:396(8) DCC). With the arrangement that lapses too (RJk A6.109).
Legal basis and source
art. 2:403 DCC
Frequently asked questions
Can a foreign parent issue the 403 declaration?
Yes, provided the EU Accounting Directive or the IAS Regulation applies to its consolidated annual accounts (article 2:403(1)(c) DCC).
Does the obligation to prepare annual accounts lapse too?
No. The board prepares the simplified annual accounts and the general meeting adopts them.
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Preparing Dutch annual accounts?
Your first set of annual accounts is free, for every size class. Create an account and prepare the annual accounts of your Dutch company under Title 9 of Book 2 of the Dutch Civil Code.
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