"You should set up a BV, it saves a lot of tax." We hear this almost every week. And it is true — sometimes. But it is not true for everyone. Here we work it out in concrete numbers.
The short answer
For tax purposes, a private limited company (BV) only becomes worthwhile with a high profit that you do not need all of for yourself. If you take all the profit out for private use, a sole proprietorship (eenmanszaak) is better value in 2026 in our examples, at both €60,000 and €120,000 profit (see below). The advantage of a BV is mainly in profit you leave in the BV, in liability and in investors. Where the tipping point lies for you depends heavily on your situation: work out your own situation.
Sole proprietorship: the basics (2026)
With a sole proprietorship, you pay income tax (inkomstenbelasting, IB) on your profit. You get two important deductions:
- Self-employed deduction (zelfstandigenaftrek): €1,200 in 2026 (it was €2,470 in 2025; it drops to €900 in 2027). Only if you meet the hours criterion (urencriterium): at least 1,225 hours a year on your business.
- SME profit exemption (MKB-winstvrijstelling): 12.7% of your profit after the entrepreneur deductions
What is left falls into the 2026 income tax brackets: 35.75% up to €38,883, 37.56% up to €78,426 and 49.50% above that. On top of that, you pay a 4.85% income-related health insurance contribution (Zvw) on up to €79,409 (max. approx. €3,851).
BV: how does it work?
With a BV, the profit goes to your BV, not to you personally. The BV pays corporate income tax (vennootschapsbelasting, Vpb):
- 19% on the first €200,000 of profit
- 25.8% on everything above that
After that, you have two options: salary (as DGA) or dividend.
- Salary: as a director-major shareholder (DGA), you must pay yourself a customary salary (gebruikelijk loon): in 2026, in principle at least €58,000 (or more, if a comparable job pays more). A lower salary is only possible if you can show that it is reasonable, for example because the BV cannot afford it. You pay income tax on your salary; the BV also pays a 6.10% Zvw employer's levy.
- Dividend: on dividend paid out, you pay box 2 tax: 24.5% up to €68,843 and 31% above that (2026, per person).
Assumptions behind the examples
- 2026 rates, one person, no tax partner, no other income.
- Amounts are rounded and before tax credits (heffingskortingen) (the general tax credit and the labour tax credit). These lower your income tax in both cases, but not by exactly the same amount.
- Sole proprietorship: you meet the hours criterion; no starter's deduction, investment deduction or old-age reserve.
- BV: estimated extra costs of approx. €1,500 a year (BV annual accounts, payroll administration). With full payout, all profit after tax goes to you privately as dividend.
Example 1: €60,000 profit
Sole proprietorship:
- Profit: €60,000
- Minus self-employed deduction €1,200 → €58,800
- Minus SME profit exemption 12.7% (€7,468) → €51,332 taxable
- Income tax: 35.75% on €38,883 + 37.56% on €12,449 = approx. €18,580
- Zvw contribution 4.85%: approx. €2,490
- Net: approx. €38,930
BV (€60,000 profit, all as salary):
- After approx. €1,500 in BV costs, €58,500 is left
- From that, the BV can pay at most approx. €55,100 in salary (plus the 6.10% Zvw employer's levy). That is less than the customary salary of €58,000, so you must be able to justify it
- No room left for dividend
- Income tax on approx. €55,100: approx. €20,000
- Net: approx. €35,100
→ At €60,000 profit, a sole proprietorship leaves you with an estimated €3,000–€4,000 more. For tax purposes, a BV is not worthwhile here.
Not sure whether a BV suits you?
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Example 2: €120,000 profit
Sole proprietorship:
- Profit: €120,000
- Minus self-employed deduction €1,200 and SME profit exemption 12.7% → approx. €103,700 taxable
- Income tax: 35.75% on €38,883 + 37.56% on €39,543 + 49.50% on €25,286 = approx. €41,270
- Zvw contribution (maximum): approx. €3,850
- Net: approx. €74,880
BV (€120,000 profit, salary €58,000, the rest paid out as dividend):
- Salary €58,000 → income tax approx. €21,080
- Zvw employer's levy 6.10%: approx. €3,540 (paid by the BV)
- BV profit after salary, employer's levy and approx. €1,500 in costs: approx. €56,960
- Vpb 19%: approx. €10,820 → left over: approx. €46,140
- Box 2 tax on the dividend: 24.5% = approx. €11,300
- Net private income: approx. €71,750
→ At €120,000 profit that you take out in full for private use, a BV in 2026 is not better value: in this example, the sole proprietorship comes out about €3,000 higher. Tax credits make that difference a little smaller, because a lower salary gives you more credit, but in this example they probably do not reverse it.
Where a BV does pay off: leaving profit in the company
The picture changes if you do not need all of the profit. In the €120,000 example, if you leave the profit after Vpb (approx. €46,000) in the BV, you only pay 19% Vpb on it for now and no box 2 tax yet. That tax only comes when you pay it out later. With a holding company, you can set profit aside or reinvest it this way, with the tax deferred. That is deferral, not exemption: building up a self-managed pension (pensioen in eigen beheer) has not been possible since 2017. If you want to leave profit in the company, a BV can become worthwhile at a higher profit. Work out your own situation.
Other considerations
- Liability: with a sole proprietorship, your private assets are liable. With a BV, they are protected. For high-risk sectors, that alone is an argument.
- Investors: an investor cannot buy shares in a sole proprietorship. That has to go through a BV.
- Image: some large business clients prefer to work with a BV.
Setting up a BV? We arrange it.
Civil-law notary, articles of association and registration with the Chamber of Commerce (KVK). We start with a baseline assessment of your situation and then make a tailored price proposal.
Summary: which one when?
| Situation | Advice |
|---|---|
| Profit up to approx. €60K, no particular risk | Sole proprietorship |
| Profit you need in full for private use | Usually a sole proprietorship, even at €120K |
| High profit, partly left in the company or reinvested | A BV can be worthwhile, work it out |
| Investors or several shareholders | BV |
| High liability | Consider a BV (regardless of profit) |
The amounts in this article are estimates based on the 2026 rates. In doubt? Book a free introductory call. We will look together at whether a BV suits your situation, without a sales pitch.