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:
All stocks and company assets are transferred to your private assets when you stop. This also applies to, for example, your company car. You as an entrepreneur supply these assets to yourself as a private person. If you deducted VAT when you purchased the assets, you must now pay VAT on them. The amount of VAT is based on the value of the goods at the time you start to use them privately. It is part of the final VAT return (see step 5).
Transfer the vehicle registration number to your own name
Do you have a vehicle registered in the name of your sole proprietorship? Do not forget to transfer the registration number to your own name when you deregister your company. Read on RDW.nl what you must do (in Dutch).
Does your sole proprietorship have loans? Check what the agreements are. If you cannot fulfil your obligations, then contact the financier and try to find a solution.
Do you have a lease car or other lease agreements? Check the duration of the contract. Contact the leasing company (lessor) to find out what the options are. Another option is to offer your contract for takeover.
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.
After you end your sole proprietorship, you remain liable for risks. For example, you still have to pay off your debts. Therefore, make sure you handle everything properly. Some business insurers also cover risks that come with ending your business.
Get an expert to help you
The (financial) consequences of ending your sole proprietorship can be complicated. Ask advice from an expert or accountant if you need help.
2. 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.
3. 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.
4. Deregister your sole proprietorship from the Business Register
Deregister your sole proprietorship from the Dutch Business Register. Deregistration is free of charge. You can deregister online or by mail. The Netherlands Chamber of Commerce KVK will inform the Dutch Tax and Customs Administration about the termination. You will receive a letter from the Dutch tax authorities about the consequences for income tax and VAT. Do you want to apply for a benefit? Do this before deregistering (see step 1).
5. Submit your final VAT return
After the Dutch Tax and Customs 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.
6. 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.
7. Check what to cancel
Make sure you cancel contracts and insurance policies of your sole proprietorship. For instance:
Canceling your business bank account
Before you close your business bank account, take care of the following:
- Download all bank statements and/or the annual financial statement.
- Stop current debit agreements and periodic transfers.
- Cancel linked credit cards and insurance.
- Do you have a G-account? Contact the Dutch tax authorities to cancel it.
Ask your bank about the procedure for canceling a business bank account.
8. 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.