The fiscal old age reserve (FOR) for individuals who conduct a business in the Netherlands
The fiscal old age reserve (FOR) does by its nature only apply to individuals who conduct a business in the Netherlands.
The FOR is in fact meant as a provision for the pension of an entrepreneur. The contributions to the FOR and the subsequent maintenance of the FOR are of a pure administrative nature to be accounted for in the annual income tax return.
The most important conditions to build-up the FOR are:
- the individual has the fiscal status of entrepreneur (conducting a business);
- the individual meets the hourly criterion: he/she can proof that he/she worked a minimum number of hours in its enterprise for the tax year; and
- the individual must be younger than the state pension age (in Dutch: AOW-leeftijd) at the beginning of the calendar.
The annual FOR contribution may not exceed 9.44% (2021) of the profits, reduced with pension premiums paid and other pension contributions received.
An absolute threshold of € 9,395 (2021) applies for the annual FOR contribution and the annual contribution may never be higher than the difference between the amount of the equity at year end and the accumulated amount of FOR reserve.
Within certain limits additional FOR contributions are allowed as “carry forward” (to the extent that in a previous year the equity was lower than the amount of the FOR in a particular year) and for certain taxable allowances and annuities received (note: for the latter the hourly criterion referred to above does not apply).
The FOR reserve will have to be released (and added to the taxable profits) for
- the amount of annuities acquired;
- the amount in excess of the equity of the enterprise; if
- in the calendar year the enterprise has been (partly) ceased, or
- the individual has reached the state pension age (in Dutch: "AOW-leeftijd") at the beginning of the calendar year, or
- the individual does not meet the hour criterion in the calendar year and the preceding year.
If an individual conducts more than one enterprise special rules apply.
| The above information is prepared with utmost care, but it cannot be guaranteed that the rules have not changed since the date of publication or that your personal situation triggers the application of specific rules which deviate from the above. Before you use this information we therefore strongly recommend that you consult us to determine your personal Dutch income tax position. If you require our follow up, you can contact us via e-mail or call us at our offices in Amsterdam + 31 (20) 570 9440 or Rotterdam + 31 (10) 2010466. |