It often happens that the partner of the entrepreneur cooperates in the case. How these costs can be handled most fiscally friendly depends on various matters.
There are four options:
- application of the co-working deduction
- payment of a real employee benefit
- entering into an employment contract
- entering into a partnership with a general partnership.
The co-working deduction is a deductible item that the entrepreneur may apply if his cooperating partner does not receive compensation or remuneration. As a condition, the entrepreneur himself meets the hour criterion and therefore spends at least 1225 hours per year on his business.
The amount of the deduction is determined as a percentage of the profit, increasing from:
- 1.25% at 525 hours
- 2.00% at 526 to 1225 hours
- 3.00% at 1226 to 1750 hours
- up to 4% from 1750 hours.
The deduction only applies if the partner receives no or only a relatively small compensation for co-operation. This means that the compensation must be less than € 5,000. This compensation is then not deductible from the entrepreneur and is not taxed by the cooperating partner.
Real labor reward
The real labor remuneration is deductible from the profit for the entrepreneur and is taxed in box 1 as a result of other activities at the partner.
In which cases the co-working deduction is more advantageous than the actual labor remuneration can not be said in advance. This is partly dependent on the level of the profit and the level of the work reward to be awarded. In general it can be said that the co-working deduction is more advantageous at lower profit levels. </ P>
One possibility is that an employment contract is entered into between the partners. However, this variant has the added bonus of having to pay wage administration and withholding payroll tax. </ P>
Partnership / VOF
The cooperating partner can, under certain conditions, participate as a full-fledged entrepreneur in the business. You then speak of a male / female firm in which the partner has his own share of the profit and business capital.
This variant will in most cases be the most advantageous because both entrepreneurs can make use of the all fiscal entrepreneur facilities. That is why this variant has more conditions.
What is the correct choice?
In order to make the right choice, a comparative calculation will have to be made.
In addition, the last variant will have to look at the tax conditions
If you would like to know more about rewarding your collaborating partner or would like advice on tax matters, please contact Visee Finance. You can also use the contact form on this site or by using the “Call me back” option . We can be reached by phone during office hours by calling +31 (0) 36 5304248.