The importance of Dutch family businesses and the tax facilities for transfers under inheritance law or gifts

The authors discuss the importance of family businesses for the Dutch economy and whetherspecific tax legislation should incentivise these enterprises or remove obstacles. There are about300 thousand family businesses in the Netherlands which form a major part of the economy.About thirty percent of the Dutch labour force is employed in family businesses. Current Dutchtax law has no specific tax regime for family businesses. Nevertheless, there are regulationsapplicable to the transfer of a family business under inheritance law or gifts which are mainlyused by family businesses. In this contribution, Dutch tax facilities that apply to a businesstransfer by gift or inheritance are considered and their pros and cons are discussed. VariousDutch studies show that the exemption in the gift and inheritance tax based on the going concernvalue is ineffective and that most firms do not need such a favourable treatment. This has fuelledthe debate regarding the continuation and design of the facilities and have let to discriminationissues