Final tax return when closing down, selling, or inheriting a business

Do you have a business in the Netherlands and do you want to close down or transfer your business, or a part of your business? You have to settle with the Netherlands Tax Administration (Belastingdienst). 

This may apply as well in case of business succession within the family, or in case of a divorce or death of your partner.

You may want to seek expert advice or contact the Dutch Tax and Customs Administration.

Closing down your business

When you discontinue your business, you must report this to the Netherlands Chamber of Commerc KVK. KVK will pass on this information to the Tax Administration. The Tax Adminstration will confirm this in writing. If you have not received this confirmation, you must inform the Tax Adminstration yourself. You must also:

• close the accounts of your discontinued business
• file the annual reports and accounts up to and including the cessation date as soon as possible
• submit a final VAT return after you make a final calculation
• report the dismissal of your staff to the Tax Administration in writing. What you need to do is described in chapter 17 Einde van inhoudingsplicht of dienstbetrekking of the Payroll Taxes Handbook (Handboek Loonheffingen, pdf, in Dutch)
• keep your administration for the mandatory minimum retention period

You must send in final tax returns for all relevant taxes, such as income tax, VAT, or any other type of tax.

• Did you build up a retirement reserve? You must settle this with your income tax (in Dutch).
• Do you withdraw goods from your business for private use? Then you must pay VAT on these goods.
• Do you want to sell business assets for which you received investment credit (investeringsaftrek) in the past 5 years? Then you must add a capital disposal charge (desinvesteringsbijtelling, in Dutch) to your discontinuation profit.

If your business is a legal entity such as a private or public limited company (BV or NV), different rules apply. Find out what this means for each business structure. 

Selling your business

Do you transfer your business or a part of your business? Then you must calculate the discontinuation profit (stakingswinst). And you must pay income tax on that amount. This is relevant for:

• income tax
• wage tax
• VAT purposes

There may be consequences for transfer tax or social insurance benefits.

Inheriting or receiving a business

Do you receive a company or part of a company as a gift, through an inheritance, or divorce? You may have to pay taxes. Which taxes and how much depends on your situation: 

• Are you in the process of a divorce or has your partner died (in Dutch)? Then the Tax Administration assumes that the assets are transferred to you at market value and you have to calculate discontinuation profit.
• Will you continue your spouse's or partner's (share in the) business? Then a transfer facility applies and you do not have to calculate discontinuation profit. You can continue the business with the same book values.

A business succession within the family involves various tax aspects (in Dutch). For example discontinuation relief, transfer schemes, gift tax and partial remission.

Business inheritance tax issues

If you inherit a business in the Netherlands, you must settle that business's tax affairs.

• It is likely that you must pay inheritance tax. If so, the Tax Administration will send you an inheritance tax return. Lower rates apply if you continue to run the business.
• For income tax purposes, the Tax Administration will send you a copy of 'Form F'. You must use this form to declare the business income for the period from 1 January to the day of the former owner's death.
• For VAT purposes, you will take over the deceased's place. This means that you will also take over all their rights and obligations with regard to VAT.

You may want to seek expert advice or contact the Netherlands Tax Administration.

Moving your company abroad

Do you move your company to a different EU country? You can select the moment at which to settle with the Netherlands Tax Administration. You can settle immediately, or defer your payment. If you want to pay the final tax return (exit taxation) at a later stage, you must supply a bank guarantee. You will also pay interest on late payment. You can choose to pay this in 10 equal, annual instalments.

Starting a new company

Do you start a new business after you ended your business? You will likely not have to submit a final tax return. Any discontinuation profit you receive from your previous business must be used for your new business. You may want to seek expert advice or contact the Tax Administration.