page

Evaluation of Tax Schemes to Facilitate Business Transfers


Publication Number: 2014-39
Authors: N. Rosenboom, T. Smits, K. van Buiren, M. Gerritsen & C. Koopmans
Commissioned by: Ministry of Economic Affairs
Published by: SEO Economic Research
ISBN: 978-90-6733-751-9

There are various tax schemes in the Netherlands to facilitate corporate succession and business transfers. Are these schemes ensuring that taxation does not form obstacle to business transfers? And are they doing so efficiently? These are the main research questions that this report sets out to answer.

Funding is one of the main problems in company transfers, especially in the SME sector, owing to information problems. The tax schemes can reduce the funding needs for company transfers and alleviate this problem. Generally speaking, the schemes result in more business transfers.

Most of the tax schemes designed to facilitate business transfers are available for all company transfers. In practice, however, the schemes provide an incentive to offer fewer companies to third parties and more to family members or employees, while the chances of a successful continuation of a company are not necessarily better if it is taken over by a family member or employee. This problem is aggravated by the fact that the schemes concerned benefit company transfers where the funding problems are likely to be less substantial (transfers within the family).

An accurate analysis of the efficiency and effectiveness of the tax schemes for company transfers is not possible at present owing to a lack of good data. As an alternative, simulation calculations were carried out based on data from the Tax and Customs Administration: these show that the tax schemes are not particularly efficient or effective. The study recommends recording good data so that a conclusive evaluation of the tax rules can be carried out in a few years’ time.


Category: 2014, Nicole Rosenboom, Tom Smits, Carl Koopmans, Competition & Innovation