Strike deduction

The strike deduction is part of the Dutch regulations of deductions for entrepreneurs. Are you winding down a business? With this scheme you can deduct (part of) your strike profit on your tax return.

Strike profit

If you stop your business, there is a chance that you will have to pay for strike profits. Strike profit occurs when the value of your business at the time of cessation is higher than the book value. This can be the case, for example, under the influence of silent reserves or through accumulated old-age reserves. The amount that your company is worth more than was determined on paper is considered a profit by the tax authorities. You must pay for this in your income tax return. Because determining strike profit is very complex, it is best to have this done by your financial advisor.

What is the strike deduction?

The deduction applies to the entrepreneur who makes a profit by ceasing one or more companies.

The deduction is equal to the strike profit achieved, but never higher than € 3,630,-. If you have several companies, the deduction can be applied separately for each company, but the deduction amount is then reduced each time by the amount that has already been deducted in the event of a strike of previous companies.

In the end, the deduction can never exceed € 3,630 for all companies together.

When do you apply the strike deduction?

A company is discontinued if it is transferred, liquidated, if the entrepreneur dies and in certain cases if the company moves abroad.

From sole proprietorship to B.V.

If the company is transferred to its own B.V., the old-age reserve will be released. If an annuity is stipulated for the old-age reserve with the own B.V. or with a professional insurer, the release of the old-age reserve can also take place under the strike profit exemption. If you do not have a strike profit, you can still use the strike deduction by adding to the old-age reserve. Because of the strike, the amount of the addition belongs to the strike profit and you can still use the strike deduction in this way.

Want to know more?

The Dutch government explains what things you have to arrange when you are ceasing your company in this 'Ending your business checklist'. In this article, Lexlupa sets out a list of tax benefits for entrepreneurs in the income tax sector.  This article does the same for entrepreneurs in the VpB. Do you have questions about ceasing your business activities, need help with calculating strike profit / deduction, or do you want our support in realizing your ambitions or navigating Dutch regulations and law? Feel free to contact us! We are happy to help.

Lexlupa stands for a multidisciplinary use of tax, legal and economic expertise. We provide advice and guidance to companies, institutions and individuals at 'life events'; at important events in a business or personal field, Lexlupa helps  to make well-informed choices and to arrange things in the right way.