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). In case of business succession within the family, a divorce or death of your partner, this applies as well (in Dutch).

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

Closing down your business

If your business ceases trading, you must report this to the Dutch Chamber of Commerce (KVK). KVK will pass on this information to the Tax Administration. They will send you a written confirmation. 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 step 17 Einde van inhoudingsplicht of dienstbetrekking of the Payroll Taxes Handbook (Handboek Loonheffingen, pdf, in Dutch)

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

• Did you have 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.

If your business is a legal entity such as a private or public limited company (bv or nv), different rules apply.

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

Transferring your business may also have capital gains tax consequences or affect social insurance benefits.

Family succession

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

Death or divorce

Are you in the process of a divorce or has your partner died? Then the Tax Administration assumes that the assets are transferred to you at market value. Therefore you have to calculate discontinuation profit.

Do you continue your spouse’s or partner’s (share in the) business? Then a transfer facility will apply and calculating discontinuation profit is not necessary. This means you can continue the business with the same book values.

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 Dutch Tax and Customs Administration will send you an inheritance tax return. Lower rates apply if you continue to run the business you have inherited.
• For income tax purposes, the Dutch Tax and Customs 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 owner'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 Dutch Tax and Customs Administration.

Moving your company to a foreign country

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