In the Netherlands a “tribal law” essentially delaying a tax benefit and the construction of various periods distributed. The goal is usually to that imposing unique revenue pay tax increase taxes is adapted.
A correct root (literally: origin right) is a right to a number of pension payments. In the Dutch tax law a correct root construction for taxes on redundancy compensation could (art 11 g salary tax Act) is used, be suspended. Some buildings tribe nor right created until 1991 under the previous articles 19 (a sole proprietorship company pension obligations) and 44j (revenue from the sale of a company).
Be the liberation of the tribe law get meets the following requirements: recipient may not have on the amount of redundancy but only receives lump-sum for a right to a number of pension payments
to start, finally at the age of sixty five payments
-After the death of the first recipient can have the right only to the spouse, registered partner or his or her own children are younger than 30 passed
-It is not allowed to close or sell the right to the pension payments
Another situation where the exemption be applied of the tribe law not for the existence of a golden parachute component. If the employment contract in bar defined compensation there is no entitlement to regular payments and instant content control must be immediately fulfilled. Then the compensation procedure is convert a root here not a solution.
The pension payments must meet the 1% risk death criterion such as in life. This means that for the duration of the payments, the risk of death a percentage or must be higher. The result of this condition is that for the elderly life shorter than pension payments for young people.
According to the rules of the tax, pension payments correspond to authorities not as periodic payments. While pensions in the course of the time remain unchanged, periodic payments change the highest amount up to five times the lowest amount can. Prepayments right shall be determined in the Treaty of the tribe. In this way referred to beneficiaries, which urgently a significant amount of the compensation of the redundancy in the early times without violation of the above mentioned criteria 1% paid.
There are three ways to use the liberation the tribe law for an indemnity compensation:
(1) You are right insurance
Ex-employers pay the indemnity directly to an insurer for the purchase of an insurance policy, with former employee as the recipient. The disadvantage of this solution is that many insurance companies cost substantial (hidden).
2. Blocked savings account
Is from 1 January 2010 a severance payment in a blocked bank account to deposit the possibility for an employer. In contrast to a life insurance policy, there is no risk of mortality for the Bank. After the death of the recipient will pay the rest of the capital to the heirs transferred after taxes. This is an advantage for the beneficiary in the event of premature death. On the other hand the longevity risk “is also for the recipient: this pays an insurance beneficiaries, annuity, to pay a bank terminates when the capital is complete.” The costs are generally lower than for insurance.
(3) a correct root-BV
A tribe right BV is a company that acts are in possession of, and as an insurance policy. It receives the termination fee payment from your employer and promises to pension payments. The advantage of a tribe right about the other options, such as is the flexibility of a corner investments as well as from the perspective of a payment. The disadvantage is the one time fee, that weighs on smaller severance compensation. By the year 2010, but it had to in Netherlands company law by 1 January 2010 are, it can be in any Member State.
In all cases, the tax benefit against the cost of creating a root right must be balanced. This makes it only attractive for higher severance pay.
the creation of a correct root-BV
What is a correct root-BV