Is it time to liquidate the BV and start a one man company, why would this be a question? Tax and accounting costs could cause you to ask yourself this question.
Time to liquidate the BV and start a one man company
That is a question you as holder of all the shares of the BV company in which you are the only person working, can be relevant.
30% ruling
The 30% ruling could have been the trigger at the time to start becoming employed by yourself, so you could qualify for the ruling. However, at the end of 2020 many 30% ruling agreements will be terminated, as the period for the holders of 12 years, 10 year and 8 year period holders have been reduced to max 5 years. This implies either this year or next year you have no more ruling.
In that perspective you maybe need no more the BV company
Limited liability
You started the BV company with EUR 1 share capital as then your liability would be limited to the amount of the share capital you put in the company. In the meanwhile you learned either your liability is limited to the amount of the invoice you send for the service you provide. Then there is not really a need for a BV company. Or you learned that the liability does not really stop with your shares, if you have behaved badly or you can be touched privately due to loans you took from your own BV company that are not acceptable.
The limited liability the BV offers is more a liability that comes with products and goods.
Mistake
You incorporate a BV company because “everybody” said you should. But now you have one, you have a simple job for which you send an invoice a month and you have very limited costs, except for the accountant. Maybe you should no longer continue the BV and start a one man company.
Is a one man company much better?
That depends on the situation and sometimes the answer is yes, and sometimes it is no.
A one man company is better:
If you have a simple company, with basically no risk on being held liable. You need the full profit as a salary, simply because you do. No value is build up in the BV, as any value is related to your personality. You (soon) have no 30% ruling, no loans with the BV. Then we think you can easily liquidate your BV company and start a one man company.
The difference is in the tax rate. In the BV you pay regular wage tax rate, plus you are due corporate tax and dividend withholding tax over the profit. In the one man company all the profit is taxed, but there are a number of tax credits you do not have in the BV company.
You also save on accounting costs, as the BV needs to publish the annual report, have a meeting of shareholders, file a corporate income tax return and run a payroll. If you pay yourself the profit, you need a dividend return to be filed. The one man company has none of these obligations, hence none of the accounting costs.
A one man company is not better than a BV:
If you do not fully consume the profit as a salary. When the company builds up value and you can actually sell the shares cashing that value. When you already took out loans from the BV. If liability is indeed limited by the BV company.
If this applies and maybe other aspects, then please continue, you have been wisely advised.
Tax is exciting
Sometimes you need to hold against the light the structure currently being used to see if that is still the best structure. And if it is, then please continue. If you feel very comfortable with the structure, even if not fiscally the best, then please continue. However, if you also have the feeling a change could be for the better, we will be glad to assist you.
