Extended…. income tax rate reduction surrendering self-administered pension (e.g. director’s pension)

By way of policy, the Minister of Finance, Economic Affairs, and Culture recently extended the surrendering of the self-administered pension, accrued in the company as well as externally, against the reduced income tax rate of 10%. The reduction is applicable as of 1 July 2020 up until 31 December 2020.

Policy in general

The 10 percent income tax rate applies as far as the lump sum payment, as a result of the surrendering of the pension, is fiscally regarded as received between 1 January 2020 and 30 December 2020. 

The only amendment compared to the prior policy is the extension of the period which is regarded as fiscally received as well as the deadline to request the surrendering, up to 30 December 2020. In principle, the same conditions are applicable as was the case in the prior policy. For more information and requirements for the surrendering of the self-administered pension, we would like to refer you to our prior “CATC-HCC NEWSFLASH: Income Tax Rate Reduction!” from January.

Consequences for the company

The policy also states that the surrendering of the pension will not have any adverse profit tax consequences for the company itself, as the surrendering will not lead to a release of the pension provision. The implementation and correction application of the relevant tax and civil laws and regulations are complicated. Please do let us know in case you have not yet decided whether to surrender your self-administered pension or not in order for us to be able to assist. 

Our Tax & Legal team is ready and happy to assist. 

NAME  E-MAIL 
Andrea Bruyning  andrea.bruyning@catc-hcc.com
Damia Croes-Arends  damia.arends@catc-hcc.com
Kiala Kock  kiala.kock@catc-hcc.com
Joseph Loaiza  joseph.loaiza@catc-hcc.com
Yandry Novoa  yandry.novoa@catc-hcc.com
Mireille de Miranda  mireille.demiranda@catc-hcc.com
Rehu Klatt  rehu.klatt@catc-hcc.com
Reint Roossien   reint.roossien@catc-hcc.com
Hannah Wever  hannah.wever@catc-hcc.com

 

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