Please note as of the year 2014 it will most likely not be possible any more to use the stamrecht facilities, please see our recent article.
In case of a severance payment a so called stamrecht or standing right limited liability company (BV) can be incorporated by the employee; the recipient of this severance payment. To this stamrecht BV the severance payment can be paid by the former employer without withholding any wage tax/premium. Depending on the facts it may be differ, but starting from a severance payment in excess of appr. EUR 75,000 a stamrecht BV may well be interesting. In case the employee has the benefit of the 30%-ruling, the BV can be used to retain this ruling and its benefits. This is especially interesting when it is not possible to find a new employment within three months after the end of the previous employment, in which case the ruling will definitely expire.
The stamrecht BV will also be interesting to start up an own business or to finance a house. The money in the BV may be used to finance the business or to invest. Tax benefits may well be possible with a stamrecht BV, but careful planning is required upfront. For example when financing the purchase of the house which is the main point of living of the shareholder of the stamrecht BV, the interest due can be deducted at a maximum income tax rate of 52%, whilst the interest income will mostly be taxed at a maximum of 20% corporate income tax. A dividend tax claim will remain, but can still be interesting to restructure the current house financing position.
The stamrecht BV is to be seen as a private insurance company at which a standing right is bought. This standing right will be qualified as a standing right provision. This provision is to accrue annually, there are several accrue methods available to this purpose. The choice for a certain method will strongly depend on the expectations of the investments/business of the company. A standing right agreement is to be made between the person who is placing the standing right in the BV and the BV itself. It is recommendable to ask the tax authorities for pre approval of the standing right agreement conditions and the transfer of the severance payment to the stamrecht / standing right BV.
When planning to set up a stamrecht / standing right BV we would recommend to consult with a tax advisor. We can offer the required tax advisory and also offer a full package, including accountancy and incorporation of the BV by parties we often work with. Please contact us for a personal meeting.
