The purpose of the business succession regulation (BOR) and the pass-through regulation (DSR) is to prevent the continuity of the business from being jeopardized by the tax burden during real business transfers. You can therefore pass the baton to the next generation with a tax incentive. The BOR and DSR play an important role in the transfer of family businesses, but pay attention to the changes already adopted at the end of 2023 and the additional changes announced.
The Cabinet proposes to reduce the mandatory continuation period from five to three years as of January 1, 2025. If this proposal is adopted, this means that a continuation period of five years will continue to apply to acquisitions occurring before January 1, 2025, while a continuation period of three years will then apply to acquisitions as of January 1, 2025.
As of Jan. 1, 2026, the proposed changes include the following:
Limit the BOR and DSR for shares to common shares with a minimum interest of 5%. Options and profit certificates, among others, will then no longer qualify for the BOR and DSR for shares.
Simplify restructuring during the possession and continuation period.
A longer possession period for donors and testators who started the business later than two years after their state pension age.
Addressing unintended use of double BOR.
Note! Since January 1, 2024, real estate made available to third parties (including rentals) already by default no longer qualifies as business assets. Donating or inheriting such real estate with application of the BOR is since then no longer possible.