International tax planning - Emigration and severance payments

If you emigrate from the Netherlands after receiving a severance payment you could have tax benefits in the future. In the Netherlands, there are several ways of postponing the taxation over a severance payment. One often used alternative is the use of a (privately owned) so called annuity company or Stamrecht BV.

A Stamrecht BV is a limited liability company constituted according to the laws of an EU member state which has an annuity agreement with the former employee / owner.

The periodical payments are usually taxed in the Netherlands at a progressive rate that will often hit the 52% income tax. If you are going to reside outside the Netherlands, other tax consequences could apply due to (i) differences in tax treatment of the annuity in the country of residence and (ii) the qualification of annuity payments in tax treaties, i.e. either labour income, pension or ‘other income’. Pension and ‘other income’ are usually taxed in the country where the taxpayer resides.

The international taxation of a Stamrecht BV and the annuities is rather complex. Our tax advisors have a great deal of experience with annuities from an international perspective, for example in relation to Australia, Germany, Switzerland, Belgium, Latvia or the Dutch Antilles.

Please do not hesitate to contact us if you have any questions.