Customary salary scheme for a newly-established BV

[Simone Bisetto]

Dear all,

 

According to this government page (https://business.gov.nl/starting-your-business/choosing-a-business-structure/private-limited-company-in-the-netherlands/), for a BV, the director needs to pay a minimum salary to himself. Does this apply across all BVs as strictly?

 

I am setting up a new business and ideally I would want to have a BV to then issue shares and raise capital.

 

However, if I need to pay to myself a minimum salary from day 1, I wonder whether it is not better to have a sole proprietorship and convert it into a BV once I actually need to raise funds.

 

I would love to hear other's experiences around what structures they chose when starting up and why.

 

And thank you so much in advance for any answer, this forum is extremely helpful (and I am sure it would be even more helpful if I spoke Dutch).

 

All the best to everyone,

Simone

[Joost Rietveld]

3 uur geleden, Simone Bisetto zei:

whether it is not better to have a sole proprietorship and convert it into a BV once I actually need to raise funds.

 

Welcome Simone

 

The above quote is spot on. There is no legal exemption for start ups anymore (cancelled last year)

[Simone Bisetto]

On 01/03/2024 at 23:30, Joost Rietveld said:

Welcome Simone

 

The above quote is spot on. There is no legal exemption for start ups anymore (cancelled last year)

Thank you Joost, much appreciated. On the director salary for a BV, does the so-called "Customary Salary Scheme" (below for reference) that I found on the government website applies systematically? Feels counterintuitive that the director puts capital in the BV, then has to use it to pay himself a salary, on which clearly income tax will be applied. Maybe I am missing something? Thank you so much. Simone

 

If you are a director or major shareholder, the Netherlands Tax Administration will not allow you to pay yourself an excessively low or zero salary. In Dutch, this is referred to as the gebruikelijkloonregeling or 'customary salary scheme' (in Dutch) for directors and major shareholders. Your salary has to be in line with market levels, which is why the Ministry of Finance has set a number of criteria. Your customary salary is at least the highest of the following 3 options:

-100% of the salary of a person in comparable job

-the salary of the employee with the highest wages in your company

-a fixed sum of at least €56,000 (in 2024)

[Joost Rietveld]

46 minuten geleden, Simone Bisetto zei:

Feels counterintuitive that the director puts capital in the BV, then has to use it to pay himself a salary, on which clearly income tax will be applied. Maybe I am missing something

That's where the difference between a shareholder and a director comes in to play: you as a shareholder are putting up the share capital money. You as a director get paid a salary, much like the company would do if someone else was the director in stead of you. Always keep this distinction in mind when dealing with your BV