It looks like 2023 could be a record year for dividend payments from BV (the Dutch equivalent of JSC). In any case, financial experts recommend making large payments. The reason is due to changes in Dutch tax legislation.
In 2023, the dividend tax is fixed at 26.9%. But from 2024, a progressive tax rate will be introduced: dividends up to 67 euros will be taxed at a rate of 000%, and exceeding this amount at a rate of 24,5%.
Accordingly, for those who plan to pay themselves dividends in an amount of less than 67 euros, it makes sense to postpone the payment to 000. But those who have a higher amount to pay should make payments in 2024.
If you make a payment in 2024, you will have to pay to the budget: 67 x 000% = 24,5 euros. By delaying payment until the end of the current year, you will save on tax: 16 – 415 = 18 euros.
Despite that from January 1, dividends received will go to Boxing 3 tax returns, it is more profitable to pay them in large amounts in 2023.
DGAs (directeur-grootaandeelhouder) - directors of companies who are also shareholders - were often limited to minimum dividends in order to avoid paying tax. The money accumulated in company accounts and the tax was paid later, sometimes years later.
For DGAs that think they may need a lot of cash, it makes sense to pay a large dividend in 2023 rather than wait until the tax increases. This opinion is shared by experts in the field of economics.
Pay attention! When paying dividends, you should take into account:
- A BV can only pay dividends to the extent that its capital exceeds its required reserves. In addition, the BV must be able to meet its payment obligations after paying dividends.
- When assessing their options, DGAs should consider that dividends they receive may be subject to a “wealth tax” under Box 3 of their tax return.
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Publication Date: 20.12.2023
