Contact our Tax Insurance expert

Charles
Karel Pellemans

Partner

Phone

+31 6 18 13 05 53

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Tax Insurance: insuring tax risks for certainty

As a CFO or Tax Director, you know the dilemma: you have a tax position that is legally defensible but uncertain. A ruling is not possible or takes too long, and the financial risk is considerable. Tax Insurance offers the solution: insure your identified tax risks at a fixed premium and transform uncertainty into predictable costs.

We guide you through the entire process, from risk analysis to tax advice at policy closing, advising both you and insurers on optimal tax risk coverage.

Discover our services

Transform tax uncertainty into predictable costs

What is Tax Insurance and why is it essential?

Tax Insurance is a specialized insurance product that covers identified tax risks at a fixed premium. It addresses situations where the facts are clear but the legal interpretation is uncertain. For professional organizations, Tax Insurance is crucial to:

  • Transform tax risks from unknown liabilities to predictable insurance costs
  • Facilitate transactions by removing tax uncertainties that buyers would otherwise price in
  • Obtain forward-looking certainty for future tax positions
  • Provide alternatives when rulings are not possible or take too long
  • Optimize M&A transactions by securing warranties and indemnities
Tax Insurance has two main forms: Specific Tax Liability Insurance for identified tax risks (both historical and forward-looking) and Warranties and Indemnities Insurance for broader warranties in M&A transactions. Typical risks insured are dividend tax uncertainties, transfer tax qualifications, business grounds for mergers and demergers, and complex international structures.
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Unique dual role: advice on both sides

We advise both insurers and clients for unparalleled insight into how policies are optimally structured.

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Hands-on approach with fast switching

Practical approach that insurers prefer over Big Four, operating quickly and purposefully when time-to-market is critical.

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International network and market leadership

Through Taxand Global access to 50+ countries for cross-border risks, plus organization of European Tax Insurance Conference.

Our Tax Insurance services in detail

Historical tax risks

Insurance of past tax positions for which there is uncertainty. Typical examples include the application of the dividend withholding tax exemption (0% versus 15%), security for international structures, and transfer tax exemptions in reorganizations.

Forward-looking policies

Innovative coverage for future tax positions. For example, you plan to pay dividends over the next 10 years based on a specific structure and want advance assurance that this will fall under the exemption. These forward-looking policies are becoming increasingly popular.

Private equity and fund structures

Specialist guidance of, for example, Luxembourg funds with Dutch investments. We analyze substance requirements, document business activities and provide advice on structuring policies that cover abuse-challenges from the tax authorities.

Tax guarantees in purchase agreements

Insurance of specific tax guarantees given by seller to buyer. This concerns not only direct tax liabilities but also more complex aspects such as the correct application of facilities, substance requirements, and interpretation of tax positions.

Due diligence risk optimization

Because of our double-sided experience, we know exactly what insurers want to cover and on what terms. This enables us to advise directly during due diligence which risks are insurable and which additional analyses may be required.

Transaction Structure Optimization

Guidance on formulating insured events, exclusions and representations. Correct wording ensures that insurers do not cover unnecessary risks and buyers receive adequate protection for the intended risk.

Transfer tax uncertainties

Insurance of Article 4 WBR qualifications (when share sale is treated as real estate transfer), business grounds for demergers, and application of exemptions. Common with hotels, data centers and property-intensive companies.

International structure risks

Coverage of substance requirements, treaty applications, abuse-challenges and qualifications of international holding and financing structures. Essential for multinationals and private equity funds with complex structures.

Withholding tax and substance issues

Insurance of positions around withholding tax exemptions, substance requirements for treaty applications, and anti-abuse provisions in the international context.

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Risk identification and market exploration.

Together we identify the specific risk and analyze the tax position, then specialized brokers gauge the market with all relevant insurers.

Specific risk identification

Tax position analysis

Market-wide exploration through brokers

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Quotation process and underwriting guidance

We guide the underwriting process in which underwriters deeply analyze your tax position with the help of our tax rationale.

Professional underwriting guidance

In-depth fiscal analysis support

Optimal premiums and conditions

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Policy formulation and implementation

We advise in formulating the insured event and exclusions so that insurers insure exactly the intended risk for adequate protection.

Optimal policy formulation

Adequate risk protection

Double-sided market experience

Joint Real Estate Development in an Optimal Tax Structure

A large private investor with an extensive Dutch real estate portfolio was presented with the opportunity to demolish a leased property and develop a mixed-use project at this location, comprising residential units (apartments), offices, commercial spaces, and a hotel/restaurant.

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Tax Insurance

Frequently Asked Questions

Basically all tax risks where the facts are clear and the interpretation is legal. Examples: corporate tax, dividend tax, transfer tax, VAT, payroll tax and withholding tax. Minimum risk is usually €1 million.

A ruling provides official assurance from the Dutch Tax Authorities, but requires meeting strict conditions and often takes months. Tax Insurance is faster (weeks) and possible when rulings are not available, but costs a premium.

For Warranties & Indemnities Insurance, premiums are not deductible but benefits are untaxed under the participation exemption. For Specific Tax Liability Insurance, this varies by situation and risk type.

Clear facts, minimum risk amount (€1M+), at least a well-defended legal position substantiated by respected counsel, and adequate documentation for any court proceedings.

Yes, forward-looking policies cover planned future activities. Provided that the fiscal position is based on current facts and laws, and the activity is carried out as planned.

With clear facts and analysis, a working policy can be completed within 2-4 weeks. Complex international risks or extensive underwriting may take 6-8 weeks.

Get in touch

Do you have questions about Tax Insurance options? Our specialists are ready to analyze your specific risks and explore insurance options.

Phone

+31 (0)20 435 6400

Email

contact@borgentax.nl
EJ

Evert-jan Spoelder

Karel Pellemans

Karel Pellemans