A vote on the abolition of the self-administered pension was scheduled to take place in the Senate on 20 December 2016. This concerns the bill Act on the Phasing Out of Self-Administered Pensions. We explained the content of this bill in our memorandum Self-administered pensions are being abolished! What now?
However, State Secretary for Finance Wiebes has informed the Senate in a urgent letter requested that the vote on the bill be postponed. This request was accepted.
A loophole in the new law
The reason for Wiebes’s request is, amongst other things, an article in *De Telegraaf* entitled Wiebes faces pension setback over bill on directors and major shareholders a loophole identified in the new law.
When converting a self-administered pension into a retirement benefit obligation, the entire future indexation cost relating to the pension entitlement could be charged to profit. This tax deduction for corporation tax purposes (which could amount to €150,000 or more per private limited company) could result in an estimated loss of €5 billion for the government.
Christmas
20 December is the Senate’s final sitting day of 2016. (Pension) advisers and their clients can therefore now look forward to a peaceful Christmas.
Wiebes announces that he is a novella is being prepared. This is an amendment to the existing bill. The amendment must then follow the normal legislative process. This means that the House of Representatives must first take a decision on it. The amendment can then be put to a vote in the Senate, together with the original bill.
The bill and the amendment could then come into force at the same time. The new effective date is, of course, not yet known. And it goes without saying that it cannot be ruled out that the entire phasing out of the self-administered pension scheme might ultimately not go ahead after all.
Other measures relating to the in-house pension scheme
The bill contains four further measures, which Wiebes has promised will come into force with retroactive effect from 1 January 2017:
- abolition of the 100% limit;
- abolition of the requirement to continue working;
- survivors’ bridging pension for half-orphans;
- investment firm acting as an authorised provider of annuity products.
Remaining tax plans for 2017
The remaining bills from the 2017 tax plans were, however, passed by the Senate on 20 December 2016 (with the exception of the bill on the abolition of the, which had already been rejected by the House of Representatives) deductions for listed buildings and for training expenses).
The measures set out in these proposals will therefore come into force on the dates specified (generally 1 January 2017).