Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
NL tax advantages
Sole Proprietorship
vs
Private Limited
Company
by
Jürgen van de Sande
8 June 2016
Let’s introduce myself
Jürgen van de Sande AA
accountant partner
starting companies and growers SMEs
annual reports, fisca...
OUR VISION
An entrepreneur’s life is full of important events. Like starting
your company, growing or downsizing, cooperat...
The first step is the hardest …
Little ones grow
Sometimes it hurts to let go
Program
• Introduction to the legal forms in NL
• Introduction to NL tax regime
 Sole Proprietorship
 Private Limited Li...
Scope for today’s program
• Introduction will be short!
• More details
 How and why to start as a Sole Proprietor
http://...
B.V.
Which legal forms do we know in NL?
stichting
V.O.F. coöperatie N.V.
and more...
eenmans-
zaak
B.V.
eenmans-
zaak
Common legal forms
• Sole proprietorship (eenmanszaak)
• General partnership (vennootschap onder firma, V.O.F.)
• Limited ...
Choice legal forms
• Income tax
• Corporate income tax
• Fully liable
• Limited liability
Tax regime versus Liability
Sole Proprietorship
• Entrepreneur’s allowances
• Retirement reserve
• SME profit exemption
• Income Tax
Based on Tax Legi...
Entrepreneur’s allowances
• Entrepreneur
• Hour criterion (1.225 hours)
• Deduction before taxes
 Self-employed persons’ ...
Retirement reserve
• Deduction before taxes
 9,8% of the profit
 Maximum of € 8.774
• Look out!
 Tax-deferred retiremen...
SME profit exemption
• Deduction before taxes
 14% of the profit after entrepreneur’s allowances
• Also in case of losses...
Private Limited Liability Company
• Salary director/shareholder
• Additional costs
• Corporate Income Tax
• Income Tax (sa...
Salary director/shareholder
• Usual wage settlement (article 12a Wage Tax)
 A minimum wage of € 44k applies for employees...
Additional costs
• Initial / startup costs
 Notary for deed of incorporation + € 600
 Accountant / lawyer for several co...
Corporate income tax
Tax base and rates
• CIT is charged on the taxable profits earned by the company in any
given year le...
Corporate income tax
Dividend (tax)
• Pay out profits to the shareholders
• Tax rate is 15%
• Advance tax payment on CIT a...
Income tax
Boxes
Box I: Taxable income from work and home
Box II: Taxable income from substantial interest
Box III: Taxabl...
Income tax: Box I
Taxable income from work and home
• Profits from business activities
• Income from current employment
 ...
Income tax: Box II
Taxable income from substantial interest
• Minimum of 5% of the issued capital of shares
• Regular bene...
How To Calculate Your Net Income
Get started!
Model report - Profit and loss account
net turnover
cost of sales
gross margin
personnel costs
amortisation/depreciation o...
How To Calculate Your Net Income
Sole Proprietorship
(eenmanszaak)
Profit and loss account
net turnover 600.000
cost of sales 310.000
gross margin 290.000
personnel costs 80.000
amortisatio...
Income tax declaration
profits from business activities 134.000
substract: addition to retirement reserve 9,80% 13.132
max...
Income tax declaration
profits from business activities 134.000
substract: addition to retirement reserve 9,80% 13.132
max...
How To Calculate Your Net Income
Private Limited Liability
Company
(besloten vennootschap, B.V.)
Profit and loss account B.V.
sole pro-
prietorship
additional
costs B.V. B.V.
net turnover 600.000 600.000
cost of sales 3...
Profit and loss account B.V.
sole pro-
prietorship
additional
costs B.V. B.V.
net turnover 600.000 600.000
cost of sales 3...
Income tax declaration
income from current employment
salary 67.000
taxable from current employment 67.000
income tax box ...
Income tax declaration
income from current employment
salary 67.000
taxable from current employment 67.000
income tax box ...
Income tax declaration
income from current employment
salary 67.000
taxable from current employment 67.000
income tax box ...
Income tax declaration
income from current employment
salary 67.000
taxable from current employment 67.000
income tax box ...
Income tax declaration
income from current employment
salary 67.000
taxable from current employment 67.000
income tax box ...
So … summarizing
Sole proprietorship (eenmanszaak) Private limited liability company (B.V.)
business result 134.000 busine...
… are you ready to make
a better decision for your
own business?
So …
Questions?
Upcoming SlideShare
Loading in …5
×

NL Tax Advantages Sole Proprietorship vs Private Limited Company

335 views

Published on

Workshop for Eindhoven Startups Foundation about Dutch Tax Advantages Sole Proprietorship (eenmanszaak) vs Private Limited Liability Company (besloten vennootschap, B.V.)

Questions? Contact me by:
Phone: +31 (0)40 244 42 88
Email: info@dewert.nl
Twitter: @jurgenvdsande

  • Be the first to comment

  • Be the first to like this

NL Tax Advantages Sole Proprietorship vs Private Limited Company

  1. 1. NL tax advantages Sole Proprietorship vs Private Limited Company by Jürgen van de Sande 8 June 2016
  2. 2. Let’s introduce myself Jürgen van de Sande AA accountant partner starting companies and growers SMEs annual reports, fiscal declarations finance, structure/organization, acquisition dwo and accountancy departments
  3. 3. OUR VISION An entrepreneur’s life is full of important events. Like starting your company, growing or downsizing, cooperating or ending your business. Each and every choice you make will affect the future of your company. De Wert is your partner of choice. We have been supporting entrepreneurs since 1959 with accountancy, tax and HR advice, payroll and administrative services. Therefore, no matter what phase your company is in: rest assured with De Wert. Introduction De Wert
  4. 4. The first step is the hardest …
  5. 5. Little ones grow
  6. 6. Sometimes it hurts to let go
  7. 7. Program • Introduction to the legal forms in NL • Introduction to NL tax regime  Sole Proprietorship  Private Limited Liability Company • How To Calculate Your Net Income
  8. 8. Scope for today’s program • Introduction will be short! • More details  How and why to start as a Sole Proprietor http://www.slideshare.net/senoltapirdamaz/how-and-why-to-start- as-a-sole-proprietor  Starting as a Private Limited Company http://www.slideshare.net/jurgenvdsande/starting-as-a-private- limited-company-in-nl
  9. 9. B.V. Which legal forms do we know in NL? stichting V.O.F. coöperatie N.V. and more... eenmans- zaak B.V. eenmans- zaak
  10. 10. Common legal forms • Sole proprietorship (eenmanszaak) • General partnership (vennootschap onder firma, V.O.F.) • Limited partnership (commanditaire vennootschap, C.V.) • Professional partnership (maatschap) • Private limited liability company (besloten vennootschap, B.V.) • Public limited liability company (naamloze vennootschap, N.V.) • Cooperative (coöperatie) • Foundation (stichting)
  11. 11. Choice legal forms • Income tax • Corporate income tax • Fully liable • Limited liability Tax regime versus Liability
  12. 12. Sole Proprietorship • Entrepreneur’s allowances • Retirement reserve • SME profit exemption • Income Tax Based on Tax Legislation 2016
  13. 13. Entrepreneur’s allowances • Entrepreneur • Hour criterion (1.225 hours) • Deduction before taxes  Self-employed persons’ allowance € 7.280  Starters’ allowance € 2.123
  14. 14. Retirement reserve • Deduction before taxes  9,8% of the profit  Maximum of € 8.774 • Look out!  Tax-deferred retirement reserve • Addition to your taxable income  Ending your company  National old age pension (AOW)
  15. 15. SME profit exemption • Deduction before taxes  14% of the profit after entrepreneur’s allowances • Also in case of losses  Lowering your fiscal loss
  16. 16. Private Limited Liability Company • Salary director/shareholder • Additional costs • Corporate Income Tax • Income Tax (salary, dividend and substantial interest) Based on Tax Legislation 2016
  17. 17. Salary director/shareholder • Usual wage settlement (article 12a Wage Tax)  A minimum wage of € 44k applies for employees with a substantial interest in the employer  Not applicable when the usual wage is less than € 5k per year • Others have a higher wage?  75% of that higher usual wage, but at least € 44k  The salary of the highest-paid employee • No profits to pay € 44k salary as a startup?  Request for a decision “reducing usual wage”
  18. 18. Additional costs • Initial / startup costs  Notary for deed of incorporation + € 600  Accountant / lawyer for several contracts (employment, management, loans) + € 900 • Yearly costs  Salary administration + € 300  Annual report, publication report, minutes + € 1.200  Corporate income tax declaration + € 300  Income tax declaration / profit calculation -/- € 300
  19. 19. Corporate income tax Tax base and rates • CIT is charged on the taxable profits earned by the company in any given year less the deductible losses. • The following are the applicable corporate income tax rates for 2016: Profit from Profit up to and including Rate € 0 € 200k 20% > € 200k 25%
  20. 20. Corporate income tax Dividend (tax) • Pay out profits to the shareholders • Tax rate is 15% • Advance tax payment on CIT and income tax
  21. 21. Income tax Boxes Box I: Taxable income from work and home Box II: Taxable income from substantial interest Box III: Taxable income from savings and investments (no further explanation)
  22. 22. Income tax: Box I Taxable income from work and home • Profits from business activities • Income from current employment  Salary director/shareholder • Tax rate is progressive to a maximum of 52%
  23. 23. Income tax: Box II Taxable income from substantial interest • Minimum of 5% of the issued capital of shares • Regular benefits and/or sales benefits  Dividend  Sale of shares • Tax rate is 25%
  24. 24. How To Calculate Your Net Income Get started!
  25. 25. Model report - Profit and loss account net turnover cost of sales gross margin personnel costs amortisation/depreciation of (in)tangible fixed assets housing costs car and transport costs sales costs other costs total operating expenses operating result financial income and expense result before taxation taxation result after taxation
  26. 26. How To Calculate Your Net Income Sole Proprietorship (eenmanszaak)
  27. 27. Profit and loss account net turnover 600.000 cost of sales 310.000 gross margin 290.000 personnel costs 80.000 amortisation/depreciation of (in)tangible fixed assets 10.000 housing costs 20.000 car and transport costs 14.000 sales costs 15.000 other costs 12.000 total operating expenses 151.000 operating result 139.000 financial income and expense 5.000- result 134.000
  28. 28. Income tax declaration profits from business activities 134.000 substract: addition to retirement reserve 9,80% 13.132 max 8.774 8.774 substract: entrepreneur's allowance - self-employed persons’ allowance 7.280 - starters’ allowance 2.123 9.403 profits from business activities before SME profit exemption 115.823 substract: SME profit exemption 14% 16.215 taxable profits from business activities 99.608 income tax box 1 43.323 income related contribution health care insurance act 2.902 total tax 46.225 net income 87.775
  29. 29. Income tax declaration profits from business activities 134.000 substract: addition to retirement reserve 9,80% 13.132 max 8.774 8.774 substract: entrepreneur's allowance - self-employed persons’ allowance 7.280 - starters’ allowance 2.123 9.403 profits from business activities before SME profit exemption 115.823 substract: SME profit exemption 14% 16.215 taxable profits from business activities 99.608 income tax box 1 43.323 income related contribution health care insurance act 2.902 total tax 46.225 net income 87.775 deferred tax (for retirement reserve) 1.330 net income after deferred tax 86.445 total tax including deferred tax 47.555
  30. 30. How To Calculate Your Net Income Private Limited Liability Company (besloten vennootschap, B.V.)
  31. 31. Profit and loss account B.V. sole pro- prietorship additional costs B.V. B.V. net turnover 600.000 600.000 cost of sales 310.000 310.000 gross margin 290.000 290.000 personnel costs 80.000 67.000 147.000 amortisation/depreciation of (in)tangible fixed assets 10.000 10.000 housing costs 20.000 20.000 car and transport costs 14.000 14.000 sales costs 15.000 15.000 other costs 12.000 1.500 13.500 total operating expenses 151.000 68.500 219.500 operating result 139.000 68.500- 70.500 financial income and expense 5.000- 5.000- result before taxation 134.000 68.500- 65.500 taxation 20% 13.100 result after taxation 52.400
  32. 32. Profit and loss account B.V. sole pro- prietorship additional costs B.V. B.V. net turnover 600.000 600.000 cost of sales 310.000 310.000 gross margin 290.000 290.000 personnel costs 80.000 67.000 147.000 amortisation/depreciation of (in)tangible fixed assets 10.000 10.000 housing costs 20.000 20.000 car and transport costs 14.000 14.000 sales costs 15.000 15.000 other costs 12.000 1.500 13.500 total operating expenses 151.000 68.500 219.500 operating result 139.000 68.500- 70.500 financial income and expense 5.000- 5.000- result before taxation 134.000 68.500- 65.500 taxation 20% 13.100 result after taxation 52.400 available for dividend 52.400 dividend tax 15% 7.860 net dividend 44.540
  33. 33. Income tax declaration income from current employment salary 67.000 taxable from current employment 67.000 income tax box 1 26.367 employed person's tax credits 1.784- income related contribution health care insurance act 2.902 total tax 27.485 net income 39.515
  34. 34. Income tax declaration income from current employment salary 67.000 taxable from current employment 67.000 income tax box 1 26.367 employed person's tax credits 1.784- income related contribution health care insurance act 2.902 income from substantial interest dividend 52.400 taxable income from substantial interest 52.400 income tax box 2 25% 13.100 substract: dividend tax 7.860 total tax 27.485 5.240 net income 39.515 39.300 78.815
  35. 35. Income tax declaration income from current employment salary 67.000 taxable from current employment 67.000 income tax box 1 26.367 employed person's tax credits 1.784- income related contribution health care insurance act 2.902 income from substantial interest dividend 52.400 taxable income from substantial interest 52.400 income tax box 2 25% 13.100 substract: dividend tax 7.860 total tax 27.485 5.240 total tax including corporate income tax 53.685 net income 39.515 39.300 78.815
  36. 36. Income tax declaration income from current employment salary 67.000 taxable from current employment 67.000 income tax box 1 26.367 employed person's tax credits 1.784- income related contribution health care insurance act 2.902 income from substantial interest dividend 52.400 taxable income from substantial interest 52.400 income tax box 2 25% 13.100 substract: dividend tax 7.860 total tax 27.485 5.240 total tax including corporate income tax 53.685 net income 39.515 39.300 78.815
  37. 37. Income tax declaration income from current employment salary 67.000 taxable from current employment 67.000 income tax box 1 26.367 employed person's tax credits 1.784- income related contribution health care insurance act 2.902 income from substantial interest dividend 52.400 taxable income from substantial interest 52.400 income tax box 2 25% 13.100 substract: dividend tax 7.860 total tax 27.485 5.240 total tax including corporate income tax 53.685 net income 39.515 39.300 78.815 deferred tax (for income from substantial interest) 5.027 additional costs B.V. 1.500 total tax with deferred tax and additional costs 47.112
  38. 38. So … summarizing Sole proprietorship (eenmanszaak) Private limited liability company (B.V.) business result 134.000 business result 134.000 salary entrepreneur 67.000 substract: addition to retirement reserve 8.774 additional costs B.V. 1.500 substract: entrepreneur's allowance 9.403 result before taxation 65.500 substract: SME profit exemption 16.215 corporate income tax 13.100 taxable profits from business activities 99.608 result after taxation B.V. 52.400 salary 67.000 income tax box 1 43.323 income tax box 1 26.367 employed person's tax credits - employed person's tax credits -1.784 health care insurance act 2.902 health care insurance act 2.902 deferred tax (for retirement reserve) 1.330 deferred tax (for income box 2) 5.027 additional costs B.V. 1.500 total (deferred) tax 47.555 total (deferred) tax and additional costs 47.112
  39. 39. … are you ready to make a better decision for your own business? So …
  40. 40. Questions?

×