Old age benefit for small businesses: final year in 2022

If you have a small business and are lucky enough to have some money to put aside, you should take advantage of a current tax benefit. 

The FOR (fiscal old-age reserve) currently means that small business owners such as freelancers can keep profits within their business as a ‘reserve’ to draw down when they reach pension age. 

It is a benefit for individuals, and has never applied to people with a limited liability company (BV). But it has meant that people whose work makes enough for them to be a top-rate taxpayer (around €69,000 in income) can postpone their tax – and then, because you are more likely to be a lower-rate tax payer when you have retired, this ‘future fund’ may have a tax advantage. 

By drawing down the reserve in small chunks at pensionable age – or putting it into an official pension – the entrepreneurs could pay a basic rate of income tax rather than the higher rate. 

But from 2023, this benefit will cease, as part of a set of tax changes in order to raise more money after the high business support costs of corona years, plus big bills ahead for the environment, housing and tackling crime. 

‘This means,’ says a Blue Umbrella spokesman, ‘if you have some money which can be put aside, do it now! Make the most of it for 2022!’ 


You should be aware that there have always been limits to the FOR perk, and they still apply this year. 

It is valid for people of working age, who work enough hours on the business and are considered entrepreneurs for tax purposes. The benefit has always been personal (rather than shared with a fiscal partner) and is a maximum profit percentage that you can save. The reserve has never been allowed to be greater than your business capital. 

If you already have a reserve within your company, you should be able to keep this and convert it to a pension when you reach pensionable age. But you should take personal tax advice to find out your best option. 


‘It’s always wise to have some funds for bad times and your old age, but you can also make pension-type provisions on your own,’ said a Blue Umbrella tax adviser. ‘This has been a tax efficient way to do it. In the future, you can always go to a pension fund or set up a life insurance that will pay out if you die early, or is partially a savings fund. Some of these types of life insurance qualify for tax deductions. The best option depends on your situation.’ 

Meanwhile, do not try to save within your company after 2022, because the FOR will disappear and the profit will be taxed! 

For tax advice on your personal circumstances, contact Blue Umbrella.