How do you save for your pension as an entrepreneur?

How do you save for your pension as an entrepreneur?

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Being an entrepreneur means that you will need to save money for your own pension or retirement fund. In the Netherlands, this can be done using the FOR tax ruling. The tax experts from Blue Umbrella explain how the FOR works. 

The FOR stands for: “fiscale oudedagsreserve” or, translated to English, fiscal old-age reserve. With this reserve, entrepreneurs can set aside a part of their profit for when they retire. It works as follows: with the FOR, you can set aside 9,44% of your company’s profit per year, up until a maximum amount of 8.999 euros (2019).

FOR requirements

To be able to make use of this tax ruling, you need to meet the following conditions:

  • In the corresponding calendar year, you have spent 1.225 hours or more on your business
  • You aren’t older than the AOW age (the retirement age in the Netherlands is 66)
  • You have generated profit in the year you want to use the FOR
  • The FOR amount can’t be higher than your total amount of assets in the company
  • You are continuing your business activities

Why use this ruling, instead of just saving the amount? Well, it may be beneficial to you because, at the end of the year, when the FOR is calculated, the amount used for the pension reserve will be deducted from your profit. This will result in a lower taxable profit, which means you can postpone your tax payment due to this ruling.

When do you need to pay taxes over the amount saved?

Each time you use the FOR, the amount you've saved for your pension will increase. This amount is mentioned on the balance sheet of your company as it is seen as a company asset.

There are three situations in which you should pay taxes over the total amount saved, or just a part of this amount:


Let’s say you've saved 10.000 euros during your self-employed career using the FOR. Once you reach the retirement age, this saved amount is then “freed up” in the eyes of the Dutch tax office, hence why you are required to pay taxes over the 10.000 euros once you reach this age. It will be taxed using the tax rate for people who are older than retirement age.

Quitting your business

Again, you have saved 10.000 euros using the FOR, but you are 30 years old and you are planning to quit your business because you want to work for someone on payroll.

If you are in this situation, the Dutch tax office requires you to pay taxes over the saved amount once you quit your business. Let’s say that, in this particular year, you have also generated a profit of 10.000 euros. This means that your company will be taxed on the 20.000 euros (10.000 profit + 10.000 savings).

Life annuity

You will also need to pay taxes when you transfer parts, or the full amount, saved using the FOR to a life annuity account. The amount you transfer to the life annuity account from the FOR is taxable.

However, one benefit is that the premiums you pay for the life annuity account are tax-deductible on your annual income tax return.

Beneficial, yes or no?

To be certain if using the FOR is beneficial in your case, we strongly advise you to contact a financial advisor who can help you with the financial planning of your life and business, so you have a clear vision of your financial future.

Interested in more information about Blue Umbrella and their tax services? Call a Blue Umbrella tax expert on +31 (0)20 46 87 560 or fill in the contact form below.

Contact Blue Umbrella

For more information, call +31 (0)20 46 87 560 or fill in this form. 

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Viviënne Wormsbecher


Viviënne Wormsbecher

Viviënne Wormsbecher is a tax adviser with Blue Umbrella. Viviënne finished her bachelors in law and is specialized in the field of international tax law. Viviënne regularly provides workshops...

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