Family businesses caution: expected scaling back of the Dutch Business Succession Scheme

The Dutch government announced its plans regarding the business succession in gift and inheritance tax ("BOR") at the end of 2022. The BOR will not be abolished, but is likely to be significantly adjusted.???

What the adjustments will be is not exactly known at this stage. This spring, the government will among others investigate the following options:?

• realising a better distinction between company and investment assets.
• limiting the application of the BOR to ordinary voting shares.
• dropping the employment requirement in income tax.
• adjusting the current possession and continuation requirement (“bezits- en voortzettingseis”) in the BOR so that it has a more positive impact on company flexibility.
• the one-time application of the BOR when the same company is transferred between the same persons.

Furthermore, the government is considering including an (additional) condition that, for example, 50% of the shares and voting rights must be held by one family. This is not expected to simplify application of the BOR and would also result in some business successions not being able to apply the BOR at all.

The government intends to include the results of the study in the Tax Plan 2024. This means that any adjustments are likely to take effect from 1 January 2024.

Are you thinking about transferring your family business? In that case, it may be wise to do so before 2024.

Contact our office for further advice. #BOR #familybusinesses #familiebedrijven #legaladvice #juridischadvies