Older employee, no dismissal file, therefore an RVU? Not necessarily

Publication date: 13 August 2026

In practice, it is still regularly assumed that a termination arrangement for an older employee automatically qualifies as an Early Retirement Scheme (RVU) if the employer cannot easily terminate the employment contract under employment law, for example because there is no sufficiently substantiated performance file. That assumption is too simplistic.

For tax purposes, the assessment of whether an arrangement qualifies as an RVU is based on a different framework than the employment law assessment of whether an employment contract can be terminated. The question whether an employer has a sufficient legal basis for dismissal is not the same as the tax question whether a termination arrangement is intended to bridge the period until the employee becomes entitled to pension benefits or reaches state pension age.

The Dutch Wage Tax Act (Wet op de loonbelasting 1964), guidance issued by the Dutch Tax Authority, and case law show that an arrangement does not qualify as an RVU where the intended termination is based on an objective and age-neutral reason. Examples include a lasting breakdown in the employment relationship, differences of opinion regarding the execution of the role, organizational changes or other business-related circumstances. These circumstances should not automatically be equated with the statutory reasonable grounds for dismissal under Article 7:669 of the Dutch Civil Code. For tax purposes, the decisive factor is not that the employee is approaching retirement age, but rather the actual reason why the employment relationship is coming to an end.

There is, however, an important condition. The employer must be able to substantiate the factual reason for proposing a termination arrangement with the employee concerned. An employer may not have a dismissal file that would satisfy employment law requirements, while still possessing sufficient evidence demonstrating that age played no role in the decision to terminate employment. Such evidence may include emails, records of meetings, internal communications or statements from managers.

This is precisely why a qualitative RVU assessment is of great importance. The Dutch Wage Tax Act requires an employer, as withholding agent, to carefully investigate and weigh all relevant facts and circumstances before taking a tax position on whether an arrangement qualifies as an RVU. Obtaining advice from a specialist not only helps establish a well-founded position, but also contributes to fulfilling the employer’s tax investigation obligation. The absence of a legally sufficient dismissal ground under employment law does not automatically mean that a termination arrangement will qualify as an RVU for tax purposes.