The entrepreneur leaving the Netherlands, does that have tax implications? Is it simply leaving, or are obligations to take care of before and after you left?
Entrepreneur leaving the Netherlands
An entrepreneur in this respect is a person either owning a one man company, or ZZP company or freelance company. However, an entrepreneur can also be a sole shareholder of a BV company.
Entrepreneur leaving the Netherlands -self employed
The entrepreneur leaving the Netherlands being a one man company needs to terminate the registration of the company with the Chamber of Commerce. A one man company is a transparent company. It is not a vehicle, cannot accept commitments itself. Hence the moment the entrepreneur moves away for good, the company needs to be terminated.
Emigrating from the Netherlands is made official by visiting city hall a few days before you leave. Important is to provide your new foreign address details to the city hall. City hall will update the Dutch tax office with these details.
Why is it important to provide your foreign address details
The company is deregistered at a certain date. Then still, even if you left, the Value Added Tax return for that period and often some following periods need to be filed. If you forget to file you get a penalty and an ex officio assessment is imposed. Such an assessment needs to be solved.
Entrepreneur – sole shareholder director BV company
The BV company is a formal entity. Nevertheless, the same rules apply. A BV company is only a tax resident in the Netherlands if the director of the BV company is a Dutch tax resident. If you leave the Netherlands, but the BV company remains as it is. You need to appoint a Dutch tax resident as director to avoid the BV moving with you to the other country.
Trust companies are companies you might have learned about in the news. They facilitate large multinational companies in the Netherlands with the position of director. They act as if they are the director to make the BV company a Dutch tax resident.
This service is challenged by the EU. This is a rather expensive service. Please try to find a relative or friend to act as director while you move away. But you need to inform that person also about the director liabilities. That might make them not accept the position.
The moment when you, the shareholder of your BV company, move away, the tax office will impose a tax assessment for you. You have appointed a local director, why a tax assessment?
While you generated profit in the Netherlands, this profit was stored in the general reserve on the balance of the BV company. If you take out this profit, you pay 26,5%( 2021) dividend and income tax combined.
To avoid you taking out this general reserve amount while you reside in another country, the Dutch tax office already imposes the full amount of tax obligation to you when you leave the Netherlands. This tax amount is not to be paid. The tax assessment is valid the rest of your life, which use to be 10 years. Dutch turned out to have patience after all, as some waited the 10 year period and then cashed at no tax the profits.
The moment you sell the shares of the BV, terminate the BV, put the shares to usufruct or cash the money, that is the moment you are to pay the assessment. The tax office will start a collection procedure.
Dutch (business) bank account
Banks operating in the Netherlands are under instruction of the national bank. The national bank has instructed banks not to facilitate bank accounts for companies of whom the owner/shareholder is not residing in the Netherlands. We can only assume that this is done from a money laundering point of view.
In other words. We have experienced the bank inquiring with the tax payer living abroad, about him or her living abroad. In response to the answers given – living abroad – the Dutch bank account was closed. Business or private.
Doing business without business bank account is not possible. The bank has not empathy to possible reasons why you are no longer living in the Netherlands. Rather rigid execution of the rules. FYI.
Tax is exciting
We think tax is exciting. Thinking constantly about Dutch tax while living abroad is not exciting. If you move away from the Netherlands for good, we have the humble opinion that you should wind down your business activities before you leave entirely. That gives you peace of Dutch tax mind while living the dream abroad.