Tax counseling relating to the emigration of you or your company

If you emigrate from the Netherlands to another country, the Dutch tax authorities will ask you to file an emigration income tax return. This income tax return will provide the Dutch tax authorities with information regarding any substantial shareholding or pension rights on the day immediately before your official emigration date. Based on this income tax return, the tax authorities will determine whether you will be issued with a so-called conserving assessment with, in compliance with Dutch tax law, a term of ten years. As long as the emigrant does not alienate any shares belonging to a substantial shareholding or does not enjoy any profit distribution on these shares or (partly) alienates pension rights, the conserving assessment will not directly result in taxation of Dutch income tax. Besides Dutch income tax law, the national tax law of the emigrant’s new country of residence is also relevant. If both the Netherlands and the new country of residence wishes to levy income tax on an alienation of shares belonging to a substantial shareholding, for example, the applicable tax treaty, if any, will determine which country, the Netherlands or the new country of residence is entitled to levy income tax.

The EU High Court has decided in several cases that the conserving assessment is compatible with EU law.  

We also have experience with the emigration of a Dutch incorporated private limited company to another country. The reason for transferring the place of effective management of a private limited company might be better business opportunities in that country compared with the Netherlands. Following the company’s emigration, a situation of dual residency of the private limited company may arise for tax purposes. According to Dutch corporate income tax law, the company is still resident in the Netherlands for tax purposes because it was incorporated according to Dutch legal law. However, if the place of effective management (i.e. the board of directors) is situated in the company’s new country of residence, the company will qualify as tax resident for corporate income tax purposes in that country. Any tax treaty between the Netherlands and the company’s new country of residence will determine which country will qualify as the company’s country of residence and thus be entitled to levy corporate income tax on the company’s taxable income.

A key issue in such transactions is to try to complete the company’s emigration with a minimum of taxation. Under certain conditions, using secondary EU law may enable the company to emigrate to another EU country without any direct taxation.

Innovative Tax closely monitors developments in this field in international and European tax and case law. We are familiar with the relevant tax matters and, together with the local tax council in your new country of residence or that of the company, we can provide you optimal services relating to your emigration.