Protective assessment in the case of emigration
If you move from the Netherlands to another country, we may issue a so-called protective assessment. This page provides an explanation of the protective assessment.
Contents of this page:
What is a protective assessment?
For the year of your emigration, you file a tax return with an M Form. Upon having filed this returned, you might receive an assessment of taxes to be paid in the future. This is the so-called protective assessment: an assessment on your income to be protected.
A protective assessment is valid for a term of 10 years, except where the assessment concerns substantial shareholding, in which case it is valid for an unlimited term.
How much will I need to pay?
The amount of your protective assessment is calculated as follows:
- Add the tax on your regular income in Box 1 to the tax on the income to be preserved.
- Subtract the tax to be paid under your regular assessment from the result.
The highest tax rate applies to the income to be preserved.
Pension rights accrued in the Netherlands
If you have accrued any pension rights in the Netherlands or deducted your pension contributions from your income, then you have had a tax benefit. When you emigrate, we will issue a protective assessment to the amount of this tax benefit.
Provided you continue to comply with the Dutch tax rules, you may defer from paying the protective assessment for a period of no more than 10 years, after which term you can apply for the assessment to be cancelled. Should you fail to comply with our rules in those 10 years – for instance, if you commute a pension – you will have to pay the protective assessment as yet.
If you purchased an annuity in the Netherlands and deducted the premiums from your income, then you have had a tax benefit. When you emigrate, we will issue a protective assessment to the amount of this tax benefit.
Provided you continue to comply with the Dutch tax rules, you may defer from paying the protective assessment for a period of no more than 10 years, after which term you can apply for the assessment to be cancelled. Should you fail to comply with our rules in those 10 years – for instance, if you surrender your annuity – you will have to pay the protective assessment as yet.
Capital sum insurance, savings account, or investment account associated with homeownership
If you have a capital sum insurance associated with homeownership, an owner-occupied home savings account, or an investment account associated with homeownership and you emigrate without selling your house, you must state the market value at the time of your emigration, less the total amount you deposited, as the value thereof in your return. A protective assessment will only be issued if the value is higher than your exemption.
Should you receive a protective assessment, you do not have to pay it for as long as the house is owner-occupied. Provided you comply with the Dutch tax rules, you can apply for remission of the entire tax amount after 10 years.
Substantial shareholding in a company in the Netherlands
If you have a substantial shareholding in a company established in the Netherlands, you are deemed to have fictitiously disposed of this substantial shareholding when you emigrate. The profit from the substantial shareholding resulting from such fictitious disposal is added to your income in Box 2. You will receive a protective assessment on this amount.
You can obtain a deferment of payment for the tax you have to pay on the fictitious substantial gain. This can be done automatically or at your request and subject to conditions. If you emigrated prior to 15 September 2015, 15:15 hours, a deferment of payment for a period of 10 years will be granted and you can apply for remission after the end of that term. In this case, you must, however, prove that you still own the shares concerned and that the company you hold the shares in has not discontinued its business. In case you were deregistered from the municipal registers after 15 September 2015, 15:15 hours, the deferment of payment is for life. You cannot apply for cancellation of the protective assessment after 10 years. You will have to settle the Dutch substantial interest claim at some point in the future.
Should you alienate the shares, distribute a dividend on your shares or if the company in which you hold the shares ceases to exist, you must inform us thereof. In this case, you will have to pay (part of) the protective assessment.
Deferment of payment of your protective assessment
In case you emigrate to an EU or EEA Member State, you will automatically be granted a deferment of payment of your protective assessment. You do not have to pay interest on the deferment period. Should the protective assessment relate to more than one income component, deferment of payment will be granted for each separate component.
Apply for a deferment of payment
Should you not be granted deferment of payment automatically, you may apply for such deferment yourself. The protective assessment provides how to submit such application.
Revocation of the deferment of payment
We will revoke the deferment of payment granted in case any of the following situations applies:
- You move from an EU Member State to a non-EU country.
You previously emigrated from the Netherlands to this EU Member State and were automatically granted deferment of payment of a protective assessment on:
- your profits from a capital sum interest associated with homeownership
- substantial shareholding in a company established in the Netherlands
Should you wish to once more be granted a deferment of payment, please apply for such by letter. We may ask you to provide security.
- You fail to comply with the Dutch tax rules.
You are not allowed to commute a pension or surrender an annuity, for example. Should you no longer comply with the rules concerning one income component, we will only revoke the deferment of payment with respect to that income component.
Provision of security in case you emigrate to a non-EU country
If you have a capital sum insurance associated with homeownership or substantial shareholding, you must always provide security when emigrating to a non-EU country. This ensures that you will in the end always pay the tax on the sum of that insurance or on the substantial shareholding.
Security can be provided by way of:
- a bank guarantee
- a right of mortgage
- a pledge
You do not have to provide security in case you emigrate to an EU Member State or have taken out life insurance or a retirement benefit plan with an approved insurer in an EU Member State, Norway, Liechtenstein, or Iceland.