Netherlands Insolvency and Bankruptcy Tax Guide

Faillissement — Bankruptcy Procedure

• Procedure: The bankruptcy (faillissement) is declared by the rechtbank (district court) on the petition of: (a) the debtor (the company itself — eigen aangifte van faillissement), (b) a creditor (schuldeiser — typically the Belastingdienst or a bank), or (c) the Public Prosecutor (in the public interest). The court appoints a curator (bankruptcy trustee) who takes control of the bankrupt estate and liquidates the assets. The bankruptcy freezes all claims — creditors must file their claims with the curator.
• Belastingdienst as initiator: The Belastingdienst frequently initiates bankruptcy petitions for unpaid tax debts. The threshold: typically unpaid tax debts >€10,000, with collection actions having failed (dwangbevel, beslag). The Belastingdienst's policy is to pursue bankruptcy for persistent non-payment — particularly for: VAT (omzetbelasting — the Belastingdienst treats VAT debt as trust money), loonheffingen (payroll tax — non-payment is treated as fraud because the employer collected the tax from employees and did not remit it), and corporate tax (vennootschapsbelasting — after collection measures fail).
• Bestuurdersaansprakelijkheid (director liability): Directors may be personally liable for unpaid tax debts of the bankrupt company if: (a) the director failed to file tax returns on time (fiscale bestuurdersaansprakelijkheid — art. 36 Invorderingswet), (b) the director continued trading while the company was insolvent (behoorlijk bestuur), or (c) the director made payments to other creditors while knowing tax debts were unpaid (selectief betalen — the Belastingdienst can challenge these payments as fraudulent conveyances). The curator may also hold directors liable for mismanagement under art. 2:248 BW (the Peeters/Gatzen doctrine).

Tax Debt Hierarchy — Preferential Status of the Belastingdienst

• Preferential creditor (preferente vordering): The Belastingdienst is a preferential creditor under the Invorderingswet 1990. In the distribution of the bankruptcy estate, tax debts rank: (a) first — secured creditors (mortgage holders, secured lenders — creditors met onderpand), (b) second — the Belastingdienst for certain tax debts (payroll tax, VAT turnover tax, and wage tax — the loonheffingen and omzetbelasting), (c) third — other preferential creditors (UWV for social security premiums, pension funds), (d) fourth — concurrent (unsecured) creditors (trade creditors, suppliers), and (e) fifth — subordinated creditors (shareholder loans, group company loans).
• Bodemrecht (soil right): The Belastingdienst has a special preferential right on bodemgoederen (soil assets) — assets attached to the taxpayer's real property (immovable by nature or purpose — plant, equipment, machinery, inventory, and goods affixed to the land). The bodemrecht gives the Belastingdienst priority over secured creditors (including the bank's mortgage) for certain tax debts — specifically loonheffingen and omzetbelasting. The bodemrecht is a powerful collection tool — it can trump the bank's security in a bankruptcy.
• Waiver of preferential right: In a WHOA restructuring (see below), the Belastingdienst may agree to waive its preferential right to facilitate an out-of-court restructuring. The waiver is discretionary — the Belastingdienst typically requires a restructuring plan with a higher recovery rate than in bankruptcy (the "best interest of creditors" test). The waiver is granted by the Belastingdienst's Invordering unit after a detailed financial analysis of the restructuring proposal.

WHOA — Wet Homologatie Onderhands Akkoord (Restructuring)

• The Dutch restructuring scheme: The WHOA (in force since 1 January 2021) is a court-sanctioned restructuring procedure for companies in financial distress. The WHOA allows a company to reach a restructuring agreement (akkoord) with its creditors, binding dissenting creditors if the majority approves. The WHOA applies to: (a) tax debts — the Belastingdienst can be included in the WHOA restructuring, (b) bank debt, (c) trade debt, and (d) shareholder loans (subordinated debt can be restructured). The WHOA can also restructure (convert) debt into equity.
• Tax treatment of WHOA restructuring: Debt forgiveness under the WHOA is treated as kwijtscheldingswinst (debt forgiveness gain) — the gain is exempt from corporate tax under the kwijtscheldingswinstvrijstelling (debt forgiveness exemption) in art. 3.78 Wet IB 2001 / art. 13 Wet Vpb 1969, provided the debt forgiveness is necessary to prevent insolvency and is granted by creditors in the context of a restructuring. The exemption ensures that the company does not face a tax liability on the same debt that drove it into distress.

Kwijtscheldingswinst — Debt Forgiveness Tax Treatment

• Exemption from corporate tax: When a creditor forgives all or part of a debt, the debtor realises a kwijtscheldingswinst (debt forgiveness gain). Under the kwijtscheldingswinstvrijstelling, this gain is exempt from corporate tax if: (a) the debtor is in financial distress (betalingsonmacht — insolvent or likely to become insolvent), (b) the debt forgiveness is granted by creditors in the context of a restructuring (WHOA or informal restructuring), and (c) the debt forgiveness is proportional to the creditors' recovery (not a selective forgiveness). The exemption applies to both formal (WHOA-sanctioned) and informal debt forgiveness.
• Shareholder debt forgiveness: If a shareholder (DGA) forgives a loan to the BV, the debt forgiveness gain is also exempt from corporate tax under the kwijtscheldingswinstvrijstelling (provided the BV is in distress). However, the forgiving shareholder must be careful — the debt forgiveness may be treated as a capital contribution (storting) by the shareholder (increasing the BV's equity and the shareholder's cost basis) rather than a loss. The DGA cannot deduct the forgiven amount as a loss (the loan is typically treated as equity under the DGA loan rules).

WSNP — Schuldsanering for Natural Persons

• Debt restructuring for individuals: The WSNP (Wet Schuldsanering Natuurlijke Personen) is a debt restructuring procedure for natural persons (including freelancers — ZZP). The procedure lasts 3 years (verlengbaar tot 5 years). During the WSNP, the debtor must: (a) transfer all income above the beslagvrije voet (seizure-free threshold — approximately 90% of the bijstandsnorm — welfare level) to the bewindvoerder (administrator), (b) cooperate with the administrator, (c) not incur new debts, and (d) make reasonable efforts to maximise income. After 3 years, remaining debts are discharged (schone lei — clean slate).
• Tax debts in the WSNP: Tax debts (personal income tax, VAT for ZZPs, health insurance premiums) are included in the WSNP. The Belastingdienst must file its claims with the WSNP administrator. The Belastingdienst generally does not oppose the WSNP if the debtor cooperates and the procedure has a realistic prospect of discharge. After the WSNP discharge (schone lei), remaining tax debts are cancelled — the Belastingdienst accepts the loss.

For the bestuurdersaansprakelijkheid (director liability) for unpaid tax, see our DGA Guide →. For tax collection procedures (dwangbevel, beslag, faillissementsaanvraag), see our Tax Audit and Appeals Guide →. For tax debt voluntary disclosure (vrijwillige verbetering), see our Tax Filing Procedures Guide →.