Deferral and roll over facilities for income from substantial shareholding

The Dutch Income Tax Act provides for various deferral and roll-over facilities for income from substantial shareholding.

Amongst others in the following situations the recognition of a capital gain (i.e. income originating from the alienation or deemed alienation of elements belonging to a substantial shareholding) can under certain conditions be deferred or rolled-over to the new owner of the shares/profit shares: 

• transfer of ownership based on family law;
• transfer of ownership based on inheritance law;
• transfer of ownership as gift;
• upon request of the taxpayer if he/she no longer has a substantial shareholding;
• upon request of the taxpayer if there is a transfer of ownership as a consequence of a share merger, legal merger or legal demerger/split-off;
• upon request of the taxpayer in case of a facilitated conversion of a corporation into a private enterprise.

In most cases it is possible to obtain an advance ruling from the Dutch tax office confirming that in a given situation the roll-over/ deferral facility applies or will apply.