Article 2:406 DCC: the duty to prepare consolidated accounts

The short answer

Article 2:406 DCC requires the entity at the head of its group to prepare consolidated accounts (paragraph 1). An intermediate holding company with subsidiaries in its group must do so too, for its part of the group (paragraph 2). Exemptions are in 2:407 and 2:408. A personal holding company that does not give central direction is not a group head.

Updated 30 October 2026

Key facts

Paragraphs 1 and 2: the group head and the intermediate holding

1. The legal entity that, alone or together with another group company, is at the head of its group, prepares consolidated accounts, which include its own financial data together with those of its subsidiaries in the group, other group companies and other legal entities over which it can exercise dominant control or over which it has central direction.

2. A legal entity to which paragraph 1 does not apply, but which has in its group one or more subsidiaries or other legal entities over which it can exercise dominant control or over which it has central direction, prepares consolidated accounts. These comprise the financial data of the group part, consisting of the legal entity, its subsidiaries in the group, other group companies that fall under the legal entity and other legal entities over which it can exercise dominant control or over which it has central direction.

Paragraph 1 addresses the top of the group. In the consolidation it includes not only its subsidiaries, but also other group companies and companies it actually controls, even without a majority of the shares. As a result, a foundation or a specially established company can end up in the consolidation (RJ 217.303).

Paragraph 2 imposes the same duty on an entity lower in the group that has subsidiaries of its own: the intermediate holding. It consolidates its own part of the group, even though the top consolidates everything once more. Art. 2:408 DCC releases it from this double duty under conditions.

What the law means by a group and a subsidiary

1. A subsidiary of a legal entity is:

a. a legal entity in which the legal entity or one or more of its subsidiaries, whether or not by virtue of an agreement with other persons entitled to vote, can exercise alone or together more than half of the voting rights in the general meeting;

b. a legal entity of which the legal entity or one or more of its subsidiaries are a member or shareholder and, whether or not by virtue of an agreement with other persons entitled to vote, can appoint or dismiss alone or together more than half of the directors or of the supervisory directors, even if all persons entitled to vote cast their votes.

A group is an economic unit in which legal entities and companies are organisationally connected. Group companies are legal entities and companies that are connected with one another in a group.

Subsidiary and group are different tests. A subsidiary is a matter of votes or appointment rights. A group requires more: the companies form one business economically and are organisationally connected. According to the legislative history, as the RJ reads it (RJ 217.102), central direction is part of this. The group test decides whether there is a duty: only the head of a group (paragraph 1) or an entity with subsidiaries in its group (paragraph 2) must consolidate. Whoever must consolidate then also includes companies over which it can exercise dominant control, even if they do not belong to the group; the scope of consolidation is wider than the group (RJ 217.301). Conversely, a sister company without a shareholding relationship can be a group company.

Paragraphs 3 to 5: banks and insurers in the group

3. The legal entity that is not a bank as referred to in article 415, and whose consolidated accounts contain to a significant extent the financial data of one or more banks, provides in the notes at least insight into the solvency of the banks as a whole.

4. The legal entity that is not an insurance company as referred to in article 427(1), and whose consolidated accounts contain to a significant extent the financial data of one or more insurance companies, provides in the notes at least insight into the solvency of the insurance companies as a whole.

5. In the consolidated accounts of a legal entity that is not a bank as referred to in article 415, article 424 may be applied to companies to be included in the consolidation that are banks, together with the companies referred to in article 426(1), second sentence.

These paragraphs are for mixed groups: an industrial or trading holding with a bank or insurer beneath it. If that financial subsidiary weighs heavily in the group figures, the notes separately give insight into its solvency. They play no role for ordinary SME groups.

Duty to consolidate and size class are linked

For its own size class, a group head counts the assets, turnover and employees of the companies it would have to consolidate (art. 2:395a(2), art. 2:396(2) and art. 2:397(2) DCC). The class of the group then determines whether consolidation is needed, with the thresholds for financial years beginning in 2024 or later.

If a company to be consolidated is a public-interest entity (art. 2:398(7) DCC), the exemption for small groups falls away and even a small group must consolidate.

The personal holding: group head or just shareholder?

Many entrepreneurs hold their shares through their own BV, often with a pension or investments in it. Such a personal holding company often holds all the votes in the underlying BV, but that does not make it a group head. The RJ and the RJk ask whether the personal holding forms an economic unit with the underlying company and actually directs it (RJ 217.203; RJk M1.109). The more operating companies it holds directly, the sooner that is the case. A personal holding that is not a group head determines its size class on its own figures.

What changed for financial years 2025 to 2027

Article 2:406 and the definitions of 2:24a and 2:24b are unchanged for these three financial years. The thresholds against which the group is measured apply to financial years beginning on or after 1 January 2024. In the RJ, chapter 217 has been reorganised for financial years from 2027; the paragraphs on the group head, the intermediate holding and the personal holding are now in paragraph 2.

Case: the De Wit family and its operating companies

Johan de Wit holds all the shares in De Wit Beheer BV. That company holds all the shares in De Wit Holding BV, and De Wit Holding holds three operating companies in construction supply. The figures for 2025 and 2026 are consistently around these values:

Situation A. De Wit Beheer only holds the shares and a few investments. The management of the business lies with De Wit Holding, where Johan, as director, directs the operating companies. De Wit Holding is then at the head of the group (paragraph 1). Its size class follows from the group figures: large, with an audit requirement. De Wit Beheer does not form a group with De Wit Holding and need not consolidate. On its own figures it is micro: turnover and employees stay below the micro thresholds, and two of the three criteria are enough. That does not apply if it is classified as a participating undertaking; that is excluded from the micro regime (art. 2:398(6) DCC; RJk M1.102) and is then small.

Situation B. Johan directs the group from De Wit Beheer: Beheer sets the budgets of the operating companies, appoints their managing directors and has a management agreement with each. De Wit Beheer is then group head (paragraph 1) and measures its class on the group: large. De Wit Holding becomes an intermediate holding (paragraph 2). If Beheer includes Holding's figures in its consolidated accounts and the conditions of art. 2:408 DCC are met, Holding need not consolidate itself and measures its class on its own figures: € 9 million in assets above the small threshold, but € 1,4 million in turnover and 11 employees below it. Two of the three: small. It is not micro, because it exceeds all three micro thresholds.

The difference between A and B therefore lies not in the shares, but in who actually directs the group. Record those facts every year, because the outcome determines which BV is audited.

Misconceptions about the duty to consolidate

• “Whoever holds more than half of the shares must consolidate.” The duty follows from the group, not from the percentage of shares alone. Once there is a duty, the consolidation also includes companies over which the entity has dominant control, with or without a group tie.
• “A personal holding is always a group head.” See the case: it depends on actual direction.
• “The intermediate holding is exempt because the top already consolidates.” Paragraph 2 imposes its own duty on it; only art. 2:408 DCC releases it from that, under conditions.
• Doing the group head's size test on stand-alone figures. Whoever must consolidate counts the group for its own class.
• Forgetting that a foundation or specially established company can fall under the consolidation if the entity has actual control over it.

How to continue after the question whether you consolidate

• Article 2:407 DCC: the small group and companies that may stay outside the consolidation.
• Article 2:408 DCC: the intermediate holding included in a larger consolidation.
• Articles 2:405–2:414 DCC: how the consolidated accounts are built up.
• Article 2:396 DCC and article 2:397 DCC: the size criteria with the group count in paragraph 2.
• RJ 217; in practice: must a holding company consolidate? and the holding company guide.

How it works at Jaarrekening.io

For the size criteria of a financial year, Jaarrekening.io asks whether the entity has subsidiaries and, if so, whether it forms a group with them. A personal holding that gives no direction answers “no” and is tested on its own figures. Otherwise you choose the group basis, or the art. 2:408 DCC basis for an intermediate holding. If the group members are recorded in the consolidation module, the app takes the group figures from there.

Sources

• Art. 2:406 DCC: duty to consolidate, text in force from 1 July 2026 (wetten.overheid.nl)
• Art. 2:24a DCC: subsidiary, text in force from 1 July 2026 (wetten.overheid.nl)
• Art. 2:24b DCC: group and group company, text in force from 1 July 2026 (wetten.overheid.nl)
• Art. 2:396 DCC: size criteria with group count (paragraph 2), text in force from 1 July 2026 (wetten.overheid.nl)
• Dutch Accounting Standards Board (RJ) guidelines (rjnet.nl)

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