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ZZP Netherlands: Financial support for a business store is essential

In a Spring 2022 memo, the Cabinet announced the abolition of FOR (Financial Reserve for Old Age). The self-employed can deduct 9.44% of the profit annually, up to a maximum of €9,632 in 2022 from tax as a reserve for their old age. This money can also be used as a commercial reserve. Due to the also announced increase in the financial scope of self-employed people to form a pension, the FOR is unnecessary according to the Cabinet and will be canceled as of 01-01-2023.

According to ZZP Nederland, expanding the financial scope of pensions for the self-employed is a step in the right direction, so that the self-employed can build up more pensions. However, eliminating FOR as a withdrawable institutional reserve is a step in the wrong direction. On the other hand, self-employed people need more opportunities to build up a company reserve, without considering this money for tax purposes as private capital in Box 3.


Protected retirement account

Recent consultations by ZZP Nederland show that many self-employed people have had to use the “pension pot” during the Covid period due to reduced staff turnover to cover current costs. According to ZZP Nederland, it would be a good idea to deposit funds for retirement into your protected pension account. “The pension due to old age is then kept and that money is not lost along the way,” says Chairman Frank Alfrink. “The fact that the government is now providing more financial space to save for retirement can help with that.”

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However, the abolition of FOR limits the ability of the self-employed to build a business barrier with tax support. Such a business buffer is in many cases essential to the company’s survival during times when the company’s turnover is lower or non-existent, as the Covid period has shown. This realization is alive among the many self-employed people affected by the coronavirus measures, according to the ZZP Nederland advisory.

buffer formation

Now that the self-employer deduction has been phased out, and if FOR were to disappear, it is important to provide a different financial incentive for reserve formation for the self-employed as an alternative to it. Thus, the Dutch Association of Entrepreneurs, co-founded by ZZP Nederland, made buffer formation the spearhead of politics. “We are calling on the Cabinet to act on this, so that independent entrepreneurs can protect their company’s survival in difficult times,” said Frank Alfrink, Chairman of the Board of Directors of ZZP Nederland and a member of the Board of Directors of VZN.

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