As from 1 January 2014 the annuity exemption will expire. If you will receive a severance pay as from 1 January 2014 this severance pay will be taxed at the highest rate of 52%. A deferral of tax, as in the annuity exemption is no longer applicable. For employees who received a severance pay in 2013 have the possibility, subject to conditions, to still use the annuity exemption. These are:
- The amount used to cover the acquisition price of the annuity must be known on December 31, 2013, but does not have to be transferred yet. The settlement agreement must be drawn up and signed by the employee and the employer before January 1, 2014. Also the settlement agreement must shows the employer grants the employee an entitlement to periodic payments to replace salary that has been or will be foregone
- The agreement between the employee and the employer states that the entitlement will be deposited with a professional insurer, an annuity private limited liability company or a bank.
- The notice of dismissal or the date of dismissal must be known on December 31, 2013. The actual dismissal can be after 2013, but may not be later than July 1, 2014.