Business succession is one of the most consequential fiscal events in the life of a Dutch entrepreneur. Whether you are planning to transfer your company to the next generation during your lifetime or arranging the transfer upon death, the tax consequences can determine whether the business survives intact or whether a forced sale becomes necessary. To prevent that outcome, Dutch tax law has long provided two important facilities: the bedrijfsopvolgingsregeling (BOR) and the doorschuifregeling (DSR). Together, they allow entrepreneurs to transfer a business with very substantial tax relief. As of 1 January 2026, however, both facilities have been significantly tightened as part of a multi-year legislative overhaul.

The 2026 changes are the most far-reaching phase of that overhaul. They affect who qualifies, which shares are covered, how long the possession period runs, and how the rules interact with corporate structures that many DGA’s rely on in practice. For any entrepreneur, director-shareholder or estate planner who has not yet reviewed their situation in light of the new rules, the changes warrant close attention.

Table of contents

1. Why the BOR and DSR matter for Dutch business owners

2. The BOR and DSR explained

3. A phased overhaul: changes across 2024, 2025 and 2026

4. The ordinary shares requirement: who still qualifies?

5. Letter shares and the risk of unintended reclassification

6. Extended possession periods: the age-related tightening

7. Anti-abuse rules and the double-BOR prohibition

8. Relaxed restructuring rules: a positive development

9. Planning steps to take now

10. Conclusion

1. Why the BOR and DSR matter for Dutch business owners

When a business is transferred by gift or inheritance, two separate tax claims can arise at once, sometimes on the same underlying value. On one side, the recipient may face a gift tax (schenkbelasting) or inheritance tax (erfbelasting) obligation on the value of the business assets received. On the other side, the transferring entrepreneur may owe income tax on the embedded capital gain built up over the years the business was owned. In a scenario without any relief, this combined burden can be large enough that a business would need to be partially liquidated or sold simply to pay the tax bill. The resulting disruption can be devastating, particularly where the business is a family enterprise that provides livelihoods for multiple people.

The Dutch legislature recognised this problem decades ago and introduced two facilities specifically designed to allow businesses to transfer without forcing a sale. The BOR significantly reduces the gift and inheritance tax burden on qualifying business assets. The DSR defers the income tax claim by allowing the transferor’s fiscal cost basis to be passed on to the successor rather than triggered at the moment of transfer. When both facilities apply, the immediate tax cost of passing a business to the next generation can be reduced to a fraction of what it would otherwise be.

That is why the BOR and the DSR are routinely among the most heavily planned-around provisions in Dutch fiscal law. Business owners with substantial companies often begin structuring their succession years in advance. But the rules governing these facilities have never been static, and the changes introduced in 2026 are among the most significant the system has seen.

2. The BOR and DSR explained

The bedrijfsopvolgingsregeling (BOR)

The BOR is a facility within Dutch gift and inheritance tax law (the Successiewet 1956). It provides a large conditional exemption when qualifying business assets are transferred by gift or upon death to a business successor. The idea behind the facility is straightforward: because a business is not a liquid asset, the beneficiary cannot necessarily pay tax on its full value without disrupting the enterprise. The BOR therefore allows a substantial portion of that value to be transferred without triggering an immediate gift or inheritance tax charge.

To qualify for the BOR, several conditions must be satisfied. The assets being transferred must constitute an active business or a qualifying shareholding in a company. The transferor must have held the interest for a minimum period (the bezitseis, or possession requirement). And the recipient must continue operating the business for a specified number of years after the transfer (the voortzettingsvereiste, or continuation requirement). Where those conditions are met, the BOR provides very significant tax relief on the transfer.

The doorschuifregeling (DSR)

The DSR operates in a different tax dimension. When a business owner transfers shares or a business interest, any latent capital gain built up over the years of ownership would ordinarily be realised and taxed. The DSR allows that tax claim to be deferred: instead of triggering the gain in the hands of the transferor, the fiscal cost basis of the interest is passed on to the recipient. The income tax obligation is carried forward rather than extinguished, meaning the successor will ultimately pay it, but only when they in turn dispose of the interest.

Like the BOR, the DSR attaches conditions, including a continuation requirement and, from 2026, a requirement that the transferred interest consists of qualifying shares.

Why both matter together

In practice, DGA’s and family business owners use both the BOR and the DSR together to minimise the combined tax cost of succession. The BOR handles the gift or inheritance tax; the DSR handles the income tax. Together they make it possible to transfer a business across generations without a forced sale. Because both are conditional on the type of interest being transferred and how long it has been held, the 2026 changes to those conditions have broad practical implications.

3. A phased overhaul: changes across 2024, 2025 and 2026

The changes to the BOR and DSR did not arrive all at once. The legislature spread the overhaul across three years, giving entrepreneurs a staged tightening rather than a single sharp shift.

In 2024, the first phase focused on limiting the BOR to interests in genuine operating companies. The rule that investment assets held within a company could benefit from the BOR alongside genuine business assets was narrowed. The threshold for this absorption was reduced, meaning more investment assets now fall outside the facility.

The 2025 changes brought adjustments that were broadly welcomed, including the shortening of the continuation requirement for recipients. Under the previous rules, a business successor had to continue the business for five years to maintain the benefit of the BOR. From 2025, that period was reduced to three years, making it somewhat easier for successors to adjust the business structure post-transfer. The possession requirement for the transferor was also refined in 2025.

The 2026 package, which is the focus of this article, introduced the most technically demanding changes. It brought the ordinary shares requirement, the age-related extension of possession periods, the double-BOR prohibition, and greater flexibility for restructurings. Each of these is examined in the sections that follow.

4. The ordinary shares requirement: who still qualifies?

Perhaps the most impactful change introduced in 2026 is the restriction of the BOR and DSR to ordinary shares. Until the end of 2025, both facilities applied to any qualifying interest that met the general conditions, regardless of the exact type of share. From 1 January 2026, the facilities apply only to what the law defines as gewone aandelen, or ordinary shares.

What counts as an ordinary share?

The legislation defines an ordinary share by exclusion. A share is ordinary if it does not carry preferential rights regarding the distribution of profits or the proceeds of liquidation. Shares that do carry such rights are classified as preferential shares (preferente aandelen) and no longer qualify for the BOR or DSR as a matter of principle.

Specifically excluded from the definition of ordinary shares are:

• Preference shares: shares with a priority right over other shareholders in profit distributions or liquidation proceeds
• Tracking stocks: shares whose return is tied to the performance of a specific part of the business rather than the whole
• Profit participation certificates (winstbewijzen): instruments that participate in profits without carrying voting rights or full share characteristics
• Options and other derivative interests in share capital

The exclusion of preference shares aligns with a long-standing concern that certain structures were designed primarily to shelter investment or passive assets behind a business facade. Requiring ordinary shares pushes the BOR back towards its original purpose: facilitating the genuine transfer of active business interests.

Preference shares from phased successions

There is an important exception for preference shares that arose in the context of a phased succession (gefaseerde bedrijfsopvolging). In many family business successions, a parent converts ordinary shares into preference shares as part of a structured handover process. These succession preference shares often represent a deferred purchase price or a retained economic interest while the business is gradually transferred to the next generation. Shares of this type remain eligible for the BOR and DSR under the 2026 rules, provided they satisfy the applicable conditions.

The distinction matters in practice: preference shares created to implement a genuine business succession remain within the system, while preference shares that existed for other commercial or tax reasons do not. The boundary between these two categories requires careful analysis in each specific situation.

5. Letter shares and the risk of unintended reclassification

The ordinary shares requirement has a particularly significant knock-on effect for DGA’s who use letteraandelen, or letter shares. Letter shares are a widely used structure in the Netherlands. Instead of holding a single class of shares, shareholders hold different classes, typically labelled A, B, C and so on. Each class carries the same nominal value and the same voting rights, but the dividend policy for each class can be set independently. This allows shareholders to take different amounts of dividend in different years according to their personal circumstances.

This flexibility has made letter shares attractive, particularly in structures with multiple shareholders who have different tax positions or different liquidity needs.

When letter shares become preference shares

Under the 2026 rules, a letter share can unintentionally be reclassified as a preferential share. The mechanism is subtle. If one shareholder takes a large dividend from their letter class while another shareholder does not, the retained profits attributable to the non-distributing class build up in the company. Over time, if the retained balance in one class significantly exceeds that of another, the share linked to the higher-reserve class may effectively carry a priority right over liquidation proceeds. At that point, the share risks being classified as a preferential share rather than an ordinary share, with the result that it no longer qualifies for the BOR or DSR.

Any company with two or more shareholders, multiple letter share classes, and a history of different dividend distributions should review whether a reclassification risk has already arisen or is at risk of arising in the near future. The only reliable way to avoid the risk is to ensure that per-class reserves remain equal across all letter classes, which requires coordinating dividend distributions carefully.

6. Extended possession periods: the age-related tightening

The BOR and DSR have always included a possession requirement: the transferor must have held the business interest for a minimum period before the transfer in order for the facilities to apply. From 2026, the possession requirement has been tightened for transferors who are of more advanced age at the time of transfer. The change responds to concerns about rollator constructions: situations where an elderly individual converts non-business assets into a business interest shortly before death or donation, specifically to claim the BOR on wealth that was never genuinely part of an active enterprise.

For inheritances, the extended possession requirement begins to apply for deceased persons who were at least three years past the pension age (AOW-leeftijd) at the time of death. For each additional year of age beyond a certain threshold, the required possession period increases by six months. For gifts, a similar extension applies for donors who are at least seven years past the pension age.

The age-related extension is unlikely to affect most entrepreneurs who have built their businesses over a long career and plan succession at or shortly after retirement. Where it has more impact is in scenarios involving later-life restructuring or the acquisition of new business interests at an advanced age.

7. Anti-abuse rules and the double-BOR prohibition

From 2026, the BOR can only be applied once per enterprise per chain of succession. If the BOR was used on a first transfer, a subsequent transfer of the same enterprise does not qualify for the BOR until a full possession period has elapsed from the moment of the first facilitated transfer. This prevents structures that were designed to strip the inheritance or gift tax base through multiple facilitated transfers in quick succession.

The rollator construction measures described in the previous section complement this prohibition. Together, these provisions reflect a clear legislative intent: to maintain the BOR and DSR as genuine facilities for business continuity, while closing off avenues that allow them to be used as general wealth transfer vehicles. The exemptions remain large and valuable, but the conditions attaching to them are now more precisely targeted at the transactions they were designed to benefit.

8. Relaxed restructuring rules: a positive development

The 2026 changes were not uniformly restrictive. On one significant point, the rules were actually made more favourable: the interaction between internal restructurings and the possession requirement. Under the previous rules, certain forms of internal restructuring could inadvertently restart the possession period. If a business owner undertook a legal merger, demerger, share conversion or similar transaction within their corporate structure, the restructured interest was in many cases treated as a new interest, meaning the clock restarted and the possession requirement had to run again from the beginning.

From 1 January 2026, restructurings that do not change the proportional entitlement of the transferor no longer cause the possession period to restart. If the entrepreneur emerges from a merger, demerger, conversion, share issuance or share buyback with the same proportional economic interest in the underlying enterprise, the possession period continues to run without interruption.

This change allows business owners considerably more freedom to reorganise their corporate structures during the period leading up to a succession. In-house mergers, holding restructurings, and other common reorganisations can now be implemented without the fear of inadvertently resetting the possession clock. The relaxation also extends to the continuation requirement on the successor’s side, giving more room for restructuring during the continuation period as long as the nature of the enterprise being continued does not fundamentally change.

9. Planning steps to take now

Given the scope of the 2026 changes, there are several areas where existing structures should be reviewed. The following are not recommendations for any specific situation, but an indication of the areas most likely to require attention.

• Review the share structure: Any company with letter shares or multiple share classes should review whether per-class reserves have remained equal. Where they have diverged, specialist advice is needed to assess the reclassification risk and identify remediation options.
• Check the possession period: Business owners approaching retirement should verify that the possession period has been satisfied for each interest they hold, and confirm whether any recent restructurings affected the clock under the old or new rules.
• Consider the age-related rules: Entrepreneurs significantly past pension age, or those acquiring new business interests at a late stage, should assess whether the extended possession periods apply to their situation.
• Assess the double-BOR prohibition: Where a family business has already been the subject of a BOR-facilitated transfer, check whether a subsequent planned transfer falls within the prohibition.
• Coordinate dividend policy: If a letter share structure is to be maintained, establish a clear protocol for coordinating dividend distributions to ensure per-class reserves remain equal. In some cases, simplifying to a single share class may be more efficient.
• Verify succession preference shares: Entrepreneurs holding preference shares arising from a genuine phased succession should confirm that those shares satisfy the conditions for the succession preference share exception.

10. Conclusion

The BOR and DSR remain among the most generous succession planning facilities available to Dutch entrepreneurs and DGA’s. The underlying principle has not changed: business continuity is valuable, and tax law should not force a sale to fund a succession tax bill. But the conditions attaching to those facilities are now considerably more technical than they were even three years ago, and the 2026 changes in particular have introduced a set of rules that interact in non-obvious ways with common corporate structures.

The ordinary shares requirement, the reclassification risk for letter shares, the age-related extension of possession periods, the double-BOR prohibition, and the relaxed restructuring rules all need to be considered together in the context of each individual structure. A structure that worked well under the pre-2026 rules may require adjustment. A structure that was set up with succession in mind may have been overtaken by legislative changes that were not anticipated at the time.

For any business owner who has not yet done so, now is the time to review the structure and the plan with a specialist who can assess the current position and identify any issues before they become problems. The complexity of the 2026 rules is an argument for early action rather than deferred attention.

Please feel free to reach out to our team if you would like to discuss your situation.