Administration
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It is very important to maintain a proper administration. Not only because you are legally obliged to do so as an entrepreneur, it also helps you to anticipate and respond to new developments on time. With proper administration and guidance, you record what is happening in your company and you keep an overview.
Free space for work costs scheme
You may give tax-free reimbursements if the total amount thereof does not exceed 1.2% of the total wage bill of all your employees together.
This is the free space. If the amount exceeds this, you must pay 80% tax on that extra amount. There are no conditions for spending within free space.
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Targeted exemption for work costs scheme
Under certain conditions certain reimbursements are not at the expense of your free space. Some examples are:
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- Subscriptions for public transport
- Travel costs up to EUR 0.19 per kilometer
- Relocation costs due to work
- Meals for overtime
Bank interest
With the current bank interest rate it is impossible to achieve the fictitious return of 4% for box 3 capital, as determined by law. On a typical savings account, not even a quarter of the notional return percentage is achieved.
A capital return levy based on the actual return achieved would be desirable to prevent your assets from evaporating. However, the recent plans of the legislator show that this is not going to happen. This requires tax-friendly solutions.
Save in Box 2
By placing assets in box 2, this is no longer subject to a tax of 1.2% on the entire assets, but a 20% corporate tax must be paid on the actual return. This entails a considerable reduction in the effective tax burden.
Saving in box 2 is possible in a number of ways. The most obvious ways are saving in an open limited partnership (C.V.) or open fund for common account. By opening an open C.V. to enter and contribute capital therein, this body becomes liable to pay corporation tax. The open C.V. capital contributed is no longer taxed in box 3. Only the profit / actual return is taxed. Saving in an open fund for common account works in practice the same as an open C.V. With an open fund for common account there is the possibility of being classified as an investment institution, this means that corporation tax does not have to be paid immediately. The choice between both constructions will depend on the wishes and situation of the wealthy person.
An alternative to the open C.V. and open fund for common account is saving in your private company (BV). Saving in a B.V. is possible when you (together with your partner) are 100% owner of the BV. The advantage in this case is that there are no annual extra costs for this construction, the return on capital is included in the annual corporate income tax return.
The above-mentioned structures for saving and investing in box 2 are advantageous from a tax point of view as long as returns are achieved that are lower than 4%. When it is expected that higher returns will be achieved in the long term, it is easy to put your assets back in box 3.
UBO-register
Recently, the 4th anti-money laundering directive was issued. A consequence of this is that every member state of the European Union must keep a UBO register (Ultimate Beneficial Owner). The UBO register will be accessible to everyone. No respect therefore goes out to the privacy of the persons who are included in this register.
A possible additional benefit of the open C.V. is that you may no longer have to be included in the UBO register. The guideline offers the possibility, but it remains to be seen how the Dutch implementation of the UBO register will take shape.
