The Dutch government has announced plans to reform the Business Succession Scheme (BOR) and the Deferral Arrangement (DSR) in the Tax Plan 2025. These changes, intended to simplify and make the schemes more effective, have been submitted for public consultation.
The BOR and DSR are fiscal measures that support entrepreneurs in transferring their business to the next generation. Following an evaluation in 2022, the government intends to modernize these schemes. Currently, anyone with any percentage of substantial interest can benefit from the BOR, but from 2026, this will be limited to those holding at least 5% of the issued capital in ordinary shares.
Additionally, the government aims to address abuses of the BOR, such as 'walker investments' where businesses are purchased primarily to avoid inheritance tax, and 'double-BOR', where a business is repeatedly gifted between parent and child. To counteract this, the ownership terms are extended, and an anti-abuse provision will be introduced.
Furthermore, certain requirements are relaxed to reduce bottlenecks for entrepreneurs, such as the requirements for ownership and continuation. These relaxations make it easier to restructure within the ownership and continuation period, even if the legal form of the business changes. The minimum term for continuation will also be shortened, from five to three years starting January 1, 2025.
The public consultation on this bill is open from April 19 to May 19, 2024 (Overheid.nl | Consultation Bill Amendment Fiscal Business Succession Facilities 2025 (internetconsultatie.nl)).
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