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If you own a business in the Netherlands, you can accrue a retirement reserve (oudedagsreserve) (in Dutch) by setting aside part of your profit every year. By doing so, you can postpone paying taxes over this amount until retirement. There is a maximum you are permitted to set aside each year.
You are permitted to convert all or part of your retirement reserve into an annuity (lijfrente), the premium of which is then tax deductible.
When do you qualify?
- You meet the hours criterion (described on the page Entrepreneur's allowance).
- You have not reached the State Pension age at the start of the calendar year.
Corona crisis: relaxation of hours criterion
As a result of the corona crisis you may not be able to meet the hours criterion to be eligible for the retirement reserve (oudedagsreserve). Therefore the Dutch Tax and Customs Administration has relaxed the hours criterion. In general this means that you may presuppose that you worked for at least 24 hours per week in your business. Read more on the relaxation of the hours criterion (Versoepeling urencriterium, in Dutch).
How to apply?
You must state on your income tax return that you wish to add an amount to your retirement reserve. If you wish to convert your retirement reserve into an annuity, you must include a request accordingly with your income tax return. Conversion requests may be submitted continuously.