For years, the Royal Concertgebouw in Amsterdam has violated the laws and regulations regarding tax benefits for charities. The cultural institution was recently reprimanded for this by the Tax Authorities, reports it F.D Friday. According to the newspaper, tens of millions in inheritances and donations may have wrongly ended up tax-free at the Concertgebouw as a result. How could this have happened? And what will change now?
1What does the violation consist of?
Donating to charities or cultural institutions is financially attractive for the donor. This is because such a donation is often (partially) deductible on your tax return. This means you pay less income tax.
The condition for this is that the recipient has been designated by the Tax Authorities as an ANBI: a Public Benefit Organization. This means, among other things, that the goals of the institution must serve a general interest, that the institution must not have a profit motive and that directors may not receive remuneration for their work.
But the donations that were collected for Het Concertgebouw through a supporting foundation (which does have ANBI status) ultimately ended up with a public limited company, or NV. This is a different type of legal form (without ANBI status), where money is divided into shares – a very exceptional structure for a cultural institution. According to presentations seen by the FD, the Tax Authorities’ criticism is that the donations should never have been sent to the NV tax-free. Most of the money donated went to building maintenance.
2Why is that bad?
Gift tax has therefore probably never been paid on donations to the Concertgebouw. This provided donors with tax benefits that they should not have had. Because the musical institution is one of the most successful fundraising organizations in the Netherlands, the amounts involved are large: approximately 100 million euros in donations over the past 25 years. Because gift tax can amount to 40 percent, this could mean tens of millions in lost income for the tax authorities.
It is not yet clear whether this tax still has to be paid. Concertgebouw director Simon Reinink says he can count on leniency, because The Concertgebouw has promised to get its structure in order before January 1, 2026.
But what if that doesn’t work? If requested, the tax authorities will allow this to be done NRC know that they cannot comment on concrete situations due to their legal obligation of confidentiality. Responding in generalities is difficult, because the consequences of a missed deadline depend on “relevant facts and circumstances in a concrete situation”. And that is “at the discretion of the inspector”.
3What needs to change?
Het Concertgebouw has been a public limited company since its founding in 1883. The reason for this is that it was built at the time with private money from the first shareholders. The specific construction with the support foundation has existed since 2001. According to spokesperson for Het Concertgebouw Jacob van der Vlugt, the reason why the Tax Authorities suddenly went after it after all these years is:million dollar question”.
But The Concertgebouw cannot ignore the criticism. In response to the tax authorities’ reprimand, a majority of almost 97 percent voted in favor of converting the NV into a foundation during a special shareholders’ meeting on October 3.
Is such a restructuring feasible before January 1? Van der Vlugt is not worried. “It is basically complete,” he says on the phone. He calls it mainly a formal change. “It’s not all that exciting for us, because we actually already functioned as an ANBI in everything. And now we make sure that everything is completely correct.”
4What will those changes mean?
Van der Vlugt wants to reassure concerned visitors: they will not notice anything about the restructuring. “And nothing will change for the musicians, employees and sponsors.” Those who may have to swallow are the shareholders.
Not that they made any money from their shares. “The Concertgebouw always had the most stable dividend: 0 euros,” says Van der Vlugt. But for many shareholders, music lovers who sometimes descended from the founders of the music hall, the shares had great emotional value. Shareholders who join the new foundation will receive the honorary title of “founder“They can – if they had one – retain their historic seat right, the preferential right to a specific seat when purchasing a concert ticket. Those who do not want this can receive financial compensation of 250 euros per share.
The 2024 annual report states that the share capital of Het Concertgebouw consists of 440,750 euros, divided into 1,763 shares of 250 euros each. If all certificate holders apply for compensation, the full amount may have to be compensated, Van der Vlugt confirms. That would be a significant bite out of Het Concertgebouw’s equity, which amounted to less than 1.4 million euros at the end of 2024.
Shareholders can request compensation until November 7. Van der Vlugt says that so far “fortunately” only one of them has done this. But he cannot rule out that more will follow. “We understand possible disappointment founder of a foundation, and that is something different than when you can say: ‘I am a shareholder of Het Concertgebouw’.”
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