Good to know
In the Netherlands, a sole proprietorship or sole tradership is called an eenmanszaak. Many so-called zzp'ers choose this legal structure.
1. Check the financial consequences
When you end your sole proprietorship, you have to deal with several financial matters. Pay attention to the following points:
2. Find out what to do if you are in debt
Are you forced to end your sole proprietorship because your company is in debt? Investigate your options with the KVK Debt flowchart. It will give you tips on how to deal with short-term and long-term debts. For temporary debts, you can first request a postponement (suspension of payment). If you are still unable to pay your debts, you must file for bankruptcy.
3. See if you are eligible for benefits
If you were born before 1960 and you own a business which is no longer viable, you can apply for a benefit via the Decree on Social Assistance to the Self-Employed (Besluit bijstandverlening zelfstandigen, Bbz). With the help of the Bbz you can receive benefits in addition to your income up to the level of a social welfare benefit. Please note: you must have spent at least 1225 hours per year on your business. If you were born after 1960, the benefit applies until the sole proprietorship ends. You can apply for the Bbz benefit at the social services of the municipality where you live.
Are you aged between 55 and the state pension age? Then you may be eligible for the Older and Partially Disabled Self-Employed Income Support (IOAZ). With the IOAZ benefit, your income will be supplemented up to social welfare level. You must be able to demonstrate that you have too little income to live on. Apply for the IOAZ benefit at the municipality where you live.
Apply before deregistering from KVK
Please note: you must submit the application for Bbz and the IOAZ benefit before you deregister your sole proprietorship with KVK.
4. Inform your staff and customers
Do you employ staff? Tell them in time that you are going to end your business. This way your staff can look for different work in the meantime. Also check which contracts or agreements you have with customers. After that, inform your customers and suppliers that you are ending your business. Read more about informing your customers on the KVK website.
5. Dismissing staff
There are rules that you must adhere to if you employ staff. If you need to dismiss staff, you must apply for a dismissal permit. You must also lay down agreements in a social plan, such as a transition payment and job counseling. Also notify the Dutch tax authorities of the dismissal.
6. Deregister your sole proprietorship from the Business Register
Deregister (in Dutch) your sole proprietorship (eenmanszaak) from the KVK Business Register. Deregistration is free of charge.
- find the business you want to deregister in the Business Register
- choose ‘opheffen eenmanszaak’ (deregister sole proprietorship)
- fill in the form
The Netherlands Chamber of Commerce KVK will inform the Belastingdienst (Dutch Tax Administration) about the termination. You will receive a letter from the Dutch Tax Administration about the consequences for income tax and VAT. Do you want to apply for a benefit? Do this before deregistering (see step 1).
7. Submit your final VAT return
After the Dutch Tax Administration has been informed that your sole proprietorship has been deregistered, you will receive a letter stating that you must submit a final VAT return. Only after you have filed your last VAT return will the Belastingdienst send you a letter to confirm that you are no longer an entrepreneur for VAT purposes.
8. Pay income tax
The Dutch Tax and Customs Administration will send you a letter confirming the deregistration from the Business Register and the tax settlement. You must file a final income tax return.
9. Keep your records
After ending your sole proprietorship, you must keep business records for at least 7 years. You may also scan the records to keep them digitally.
10. Explore new possibilities
Ending your sole proprietorship does not have to be all bad. You can focus on a new direction and make new plans. For example, by finding other work. Read tips for making new plans on KVK.nl.