The protective assessment: the bill that travels with you, and that never expires for one item

A letter lands on the mat with an amount on it that you don't have to pay. That's the protective assessment (conserverende aanslag), and the confusion it causes is understandable: it's a real assessment, with a real amount, on which in most cases not a euro is ever debited.

The Belastingdienst describes it as a tax assessment you may have to pay in the future. That "may" is the whole construction.

Why the Netherlands imposes it

On a number of things you built up in the Netherlands, you received a tax advantage at the time. Your pension contribution was deductible, your annuity premium too. The agreement behind that was that later, on payout, tax would still be paid on it.

If you move abroad, that "later" disappears from the view of the Dutch tax authorities. The protective assessment is the answer to that: the Netherlands fixes the amount at the moment you're still within reach, and defers the collection.

For what exactly

Four categories:

• Pension you built up in the Netherlands with tax relief
• Annuity of which the premiums were deducted
• Endowment insurance for the owner-occupied home, savings account or investment right for the owner-occupied home
• Substantial shareholding — 5% or more of the shares in a company

With that last one something peculiar happens: on emigration your shares are treated as if you sold them. That's called a deemed disposal, and the gain that follows from it counts as income in box 2. You sold nothing, you received no money, and there's an assessment.

The term — and the exception that costs the most

For pension, annuity and the endowment insurance a validity period of ten years usually applies. If those ten years pass without you doing anything that makes the assessment collectable, it lapses.

Only the protective assessment for a substantial shareholding is valid indefinitely. So it doesn't expire. Whoever keeps their BV and pays out a dividend or sells their shares twenty years later still has to deal with this assessment.

That difference is often overlooked, also in advice that's otherwise correct — "after ten years you're rid of it" is a true sentence about three of the four categories and an untrue one about the fourth. If you have a BV, assume this travels with you as long as the company exists.

When you do have to pay

The assessment becomes collectable if you do something that conflicts with the conditions. For pension and annuity the classic one is: surrendering. If you convert your annuity into a lump sum, the deferral is over.

For a substantial shareholding the triggers are different: you sell your shares, you pay out a dividend, or the company ceases to exist.

What you do with it

Three things, and the first is the most important.

Don't be alarmed by the amount. It's not a bill. The deferral is automatic; you don't have to apply for anything.

Keep the assessment. In ten years — or with a BV: in thirty years — it's the document with which you show what was established at the time. Put it with the papers you take along and not with the post you clear out.

Have it checked if you have a BV. The combination of a substantial shareholding, an indefinitely valid assessment and a treaty that differs per country is precisely where general information stops. This article explains that it's at play and why it doesn't pass by itself; what it means in your case belongs with a tax adviser.

This is no tax advice. See also when you need an adviser and when not.