When is a BV cheaper than a private company?
A private company can be a sole proprietorship (ZZP company) a VOF or a company with personnel.
The five most important features of the BV
A BV, both fiscally and legally, is significantly different from each other than a sole proprietorship. Below you will find the most important characteristics of the BV:
- Incorporation procedure.
The biggest difference between the sole proprietorship and the BV is that the BV also exists outside of you and is a separate legal entity. This means that you can not be held personally liable for the debts of your case.
PLEASE NOTE All banks have the director-major shareholder (dga) private sign for loans granted to the company. At that moment, the DGA is also personally liable.
When you set up a private limited company, you still need a notarial deed from a civil-law notary containing the statutes of your private company.
Especially with regard to the administration, there are some additional costs involved.
The establishment costs notary fees and such
annual expenses for the annual accounts, corporation tax declaration and payroll administration
As a private entrepreneur you pay about 40% -52% income tax. You are entitled to the self-employed deduction and SME profit exemption.
A BV pays corporation tax (VPB) on the profits achieved. The corporation tax is 20% over the first € 200,000.00 and above 25%.
As a dga you are employed by your own BV, so you also have to pay wage tax on your salary. In addition, you must pay 15% dividend tax if you pay out profits from the BV to yourself.
The company does not end with the entrepreneur’s death.
Advantages of a BV
• Lower taxes with significant profits. The turning point is high with the current tax legislation. Actually postpone tax payment.
• Liability. Private and property assets can be well separated.
• Status. Both commercially and legally.
• As a dga you can build up a pension in-house, which makes saving a lot cheaper.
• Assets in the BV fall in Box2 and not in Box3 (wealth tax)
Disadvantages of a BV
• More legal and administrative requirements
• Higher taxes at low profits than private company
• Formation costs
• Additional tax returns
• Pension provision is less favorable than the FOR
Turn sole proprietorship into a BV
There are two ways to convert your sole proprietorship into a BV:
- With a rushing transition.
- With a silent transition.
For enthusiasts, we have added an Excel sheet for making simple calculations regarding tax differences. Download
Calculate with this XLS the difference in tax burden between the BV and the sole proprietorship. For comments you can always email me.
No rights can be derived from this Excel sheet .
This sheet is intended purely for playing with numbers.
For advice on the choice of the legal form of your company, you can contact Visee Finance without any obligation. You can ask your questions via the contact form on this website or you can use the “Call me back” “Option. You can also call us by calling +31 36 5304248 . We are of course also serving customers outside the Amsterdam / Almere region. Our customers are based in Amsterfoort, Bussum, Breukelen, Naarden and Hilversum.