What changes for private limited companies with VVPRbis or liquidation reserves

The federal government is seeking additional revenue. And, as often happens, a (large) part of this will fall on the shoulders of entrepreneurs. Many entrepreneurs are wondering: should I pay out dividends before new rules?

In the new legislative programme, the government plans a higher tax burden on dividend distributions via VVPRbis and liquidation reserves. It's precisely these systems that private limited companies often use today to profit from a tax-efficient way to distribute to private individuals.

Many business owners therefore ask themselves the same question:

Does it still make sense to pay out a dividend quickly before the new rules come into effect?

To understand this, it is helpful to first briefly look at how dividend optimisation works today.

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How BVs optimise dividends for tax purposes today

In a Belgian private limited company amounts to standard withholding tax on dividends 30%.

However, there are two systems that entrepreneurs can use to significantly reduce their tax burden: VVPRbis and liquidation reserves.

VVPRbis: dividend aan 15% roerende voorheffing

The VVPRbis regime applies to private limited companies (BVs) that meet specific conditions. For example, when the shares were issued upon the formation of the company or during a capital increase with new contributions.

After a certain waiting period, the company may distribute dividends against 15% income tax instead of 30%.

For many young private limited companies, this is an important strategy for profit tax-efficiently extract it for private use.

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Liquidation reserve: setting aside profits for advantageous distribution later

A second system is the liquidation reserve.

Hereby the Private Limited Company reserves a portion of its profits and first pays on that anticipatory levy of 10%.

When the reserve is paid out later, a limited withholding tax will also apply. In practice, the total tax burden also around here% out.

This system is often used by entrepreneurs who to keep some winnings in their company for a few years before they pay it out privately.

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When can your private limited company make an accelerated distribution?

Not every private limited company automatically qualifies. That depends on the type of reserve and the age of the company.

Benefit via VVPRbis

Your private limited company can pay a dividend to 15% withholding tax once these conditions have been met

• The private limited company was established From 1 July 2013 or were new shares issued for cash.
• The shares were drowning in money (no contribution in kind).
• The shareholder has the shares uninterruptedly maintained.
• There is a waiting period of at least 3 financial years after the input.

If your private limited company meets these conditions, a dividend can be 15% Caravan werden uitgekeerd zolang het regime nog niet gewijzigd is.

2. Distribution of a liquidation reserve

Different rules apply to liquidation reserves.

A private limited company can distribute a liquidation reserve to a reduced rate When

• The reserve was created via the Profit processing.
• The BV then 10% anticipatory levy paid.
• The reserve at least 5 years has sat on the board of directors.

After this waiting period, the reserve can be paid out with a limited additional withholding tax.

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What will change under the new plans?

volgens de huidige plannen van de federale regering de tax burden on both systems to rise.

The aim is to total tax burden on dividend payments to increase to approximately 18%.

At first glance, the difference between 15 per cent% and 18 per cent% withholding tax limited.

But with larger amounts, that can quickly add up.

A simple example:

Dividend share €100.000

• 15% withholding tax = £15,000 tax
• 18% withholding tax = £18,000 tax

That's €3,000 difference on one benefit.

So, for entrepreneurs who regularly receive dividends from their private limited company, it can therefore financially interesting to look at whether an early pension is still possible.

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Please note: ensure correct documentation

If you decide to pay a dividend early repayment, it must be legally and fiscally correct.

Regardless of the system, a private limited company must also always comply with the legal rules for dividend payments:

• Balance testThere must be sufficient distributable reserves.
• Liquidity testThe private limited company must be able to pay its debts after the distribution.
• Decision via the general meeting correct reporting.

The tax authorities traditionally view dividends paid out just before a change in law with a critical eye. Therefore, Good documentation is essential.

Concreet houdt dit in dat de beslissing bij voorkeur wordt vastgelegd in een well-substantiated report of a special general meeting, in which, among other things, is motivated:

• Why the dividend is paid
• that the company meets all legal requirements
• the benefit financially responsible is

A clear justification helps to avoid that later check this would be labelled as tax avoidance.

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Conclusion: Review your dividend strategy in good time

For many private limited companies, it may be interesting today to examine whether such a accelerated dividend distribution via VVPRbis or liquidation reserves meaningful.

Not because there will be a spectacular tax increase, but because a difference of a few percent on larger amounts can quickly have an impact.

Therefore, it is best to have it calculated in good time. what is possible for your company or if an early pension is logical in your situation.