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Tax-efficient business succession

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​​​​​​​​​You want to pass on your business to the next generation. From a tax perspective, it is important to make arrangements in good time. If you fail to structure your business succession in a tax-efficient manner, you may have to pay up to 40% tax on the value of your business's shares at carry-over date. Does your business have sufficient liquidity to pay this? Or would its continuity then be at risk?

 

Tax relief for business succession
If you structure your business succession in a tax-efficient manner, the tax you have to pay may be limited to 3.4%, provided you can apply certain specific tax exemptions under Dutch personal income tax and inheritance tax law.

 

Some of the requirements your business must satisfy to apply the tax exemptions include:

 

  • the business has to be active (passive investments do not qualify);
  • your last will and testament is not in favour of your spouse;
  • your business successor(s) must have worked in the business for more than 36 months (not required for the inheritance tax exemption);
  • the minimum shareholding period requirement for the transferor is met (one year in the event of death, five in the event of a gift/donation);
  • the minimum shareholding period requirement for the acquirer is met (five years).

 

Proper advance planning is therefore essential if you want to make full use of the tax exemptions available under Dutch law in the event of business succession. AKD's tax specialists can help you ensure that the successors to your business do not pay excessive tax.

 

Tax advice on business succession
AKD helps you find a tax-efficient solution if you want to pass on your business to the next generation. Contact one of our tax specialists to find out more about tax-efficient business succession. ​​


 

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Jan-Willem Beijk

Tax Advisor, Partner

Tax

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