Emigration of substantial interest holder
If a Dutch resident holds a so-called substantial interest in a company (e.g. a share interest in a company exceeding 5%) moves his residence abroad the accrued value increase of that shareholding is subject to Dutch tax (exit taxation). This levy is calculated, in principle, as 25% of the difference between the fair market value of the shares at the time of emigration and the original acquisition price.
This tax is not payable immediately since an extension of payment is granted for this assessment. This assessment is therefore referred to as protective tax assessment. Under the rules applicable until last Tuesday, the protective assessment was waived after ten years if the substantial shareholder remained his shareholding during that entire period.
This possibility to annul the tax assessment with some patience (waiting for ten years) will be fully abolished with immediate effect. The Dutch tax authorities will retain their power to collect the tax calculated at the event of the emigration even after the ten-year period has expired. The legislation will have retroactive effect until the moment of publication of the bill, i.e. till 15 September 2015, 15:15hr. The old rules will remain applicable for substantial interest holders who emigrated before this moment.
Furthermore the proposal eliminate the possibility for emigrated substantial shareholders to convert their shareholding in cash but at the same time avoid triggering payment on the protective tax assessment. Under the conditions of the protectibe tax assessment it was possible to pay dividend distributions up to 90% of the value of the company without triggering collection of the protective assessment. This possibility is now eliminated.back to overview