When to Set Up a BV (and When Not To)

Key Takeaways

Below €100,000 annual profit, an eenmanszaak is almost always more tax-efficient.
Above €150,000 annual profit, a BV typically wins on taxes.
Between €100,000 and €150,000, the answer depends on your personal situation.
Tax is not the only factor — liability protection, business growth plans, and administrative costs all matter.
Converting from eenmanszaak to BV can be done tax-free (geruisloze inbreng) if conditions are met.

The Core Question

Almost every entrepreneur in the Netherlands faces this question at some point: Should I set up a BV?

The answer depends on three factors:

Tax efficiency — Which structure results in a lower total tax burden?
Risk and liability — Do you need limited liability protection?
Business goals — Are you planning to grow, attract investors, or sell the business?

Tax Comparison: Eenmanszaak vs. BV

How the Eenmanszaak Is Taxed

Your profit is taxed as Box 1 income at progressive rates, but you first benefit from entrepreneur deductions:

Gross profit
Minus zelfstandigenaftrek (€2,470)
Minus startersaftrek (€2,123 — first 3 years only)
Minus MKB-winstvrijstelling (14% of remaining profit)
Result = taxable income, taxed at 35.75%–49.50%

How the BV Is Taxed

Your profit is taxed in two layers:

Corporate tax (VPB) on BV profits: 19% up to €200,000, then 25.8%
DGA salary: taxed as Box 1 income (35.75%–49.50%)
Dividend: 26.9% Box 2 tax on distributions from after-tax profit

Break-Even Calculation

Here is a comparison at different profit levels (2026 rates, assuming full-year, single, no startersaftrek):

Annual Profit	Eenmanszaak Total Tax	BV Total Tax (all distributed)	Winner
€60,000	~€14,500	~€19,800	Eenmanszaak
€80,000	~€21,500	~€26,200	Eenmanszaak
€100,000	~€29,500	~€32,800	Eenmanszaak
€120,000	~€37,800	~€39,400	Close — depends on details
€150,000	~€50,300	~€48,200	BV
€200,000	~€72,600	~€62,800	BV
€300,000	~€117,500	~€95,200	BV (clear winner)

Warning

These are simplified estimates. The actual break-even point depends on many factors: your DGA salary level, social security premiums, whether you have a tax partner, pension contributions, and whether you leave profits in the BV. Always run exact calculations with a tax advisor before making the switch.

The BV Advantage: Leaving Profits Inside

The table above assumes you distribute all profits as dividends. But the BV's biggest tax advantage comes from not distributing everything.

If you leave profits inside the BV:

You only pay 19% corporate tax (instead of 19% + 26.9% = ~40.8% combined)
The retained profits can be invested, used as working capital, or held as a buffer
You only pay the 26.9% Box 2 tax when you actually take the money out

This makes the BV especially attractive if you:

Do not need all your business profit for personal expenses
Want to build up reserves for business investment
Plan to retire and withdraw profits over many years (spreading the Box 2 tax)

Beyond Taxes: Other Reasons to Choose a BV

Liability Protection

The BV is a separate legal entity. Your personal assets are protected from business debts (with exceptions for director liability and personal guarantees).

Consider a BV if:

You sign large contracts with penalty clauses
You carry significant inventory or business debt
You hire employees (employer liability)
You work in a sector with litigation risk

Credibility and Perception

Some clients and partners take a BV more seriously than an eenmanszaak. This is especially true when:

Working with large corporations or government agencies
Operating internationally
Seeking bank financing

Investment and Growth

If you plan to attract outside investors, a BV is almost always required. Investors buy shares — this is straightforward with a BV structure.

Selling the Business

An eenmanszaak cannot be "sold" as a legal entity — you sell individual assets. A BV can be sold by transferring shares, which is cleaner, simpler, and often more tax-efficient.

When NOT to Set Up a BV

A BV is not the right choice if:

Your profits are below €100,000 — The entrepreneur deductions in an eenmanszaak provide more benefit than the lower BV tax rate.
You value simplicity — A BV requires payroll administration, annual accounts, corporate tax returns, and more formal governance. If you hate administration, stick with the eenmanszaak.
Your profits are irregular — If you earn €150,000 one year and €50,000 the next, the BV's fixed costs and DGA salary requirements can be a burden in lean years.
You are starting out — Start with an eenmanszaak, enjoy the startersaftrek, and convert later when it makes sense.
The annual costs eat the benefit — A BV costs approximately €2,000–€5,000 per year in accountant fees, payroll processing, and filing costs. If the tax saving is smaller than these costs, it is not worth it.

Tip

A common rule of thumb: the BV starts to make sense when your annual profit has been consistently above €100,000 for at least two years and you expect it to stay there. One good year is not enough — you need sustained profitability to justify the BV's ongoing costs.

Converting from Eenmanszaak to BV

If you decide to make the switch, there are two methods:

Geruisloze Inbreng (Tax-Free Transfer)

You transfer your eenmanszaak to a BV without triggering income tax on the transfer. The BV continues the business at the same tax book values.

Conditions:

You must file a request with the Belastingdienst before the intended transfer date
You can request retroactive effect to the start of the fiscal year (max 3 months back from the request date, or per the beginning of the book year if the request is filed within 9 months)
The BV must continue the business for at least 3 years
Strict anti-abuse rules apply

Ruisende Inbreng (Taxable Transfer)

You "sell" your eenmanszaak to the BV. This triggers income tax on any hidden reserves (difference between book value and market value of assets). The BV takes over at market values, giving it higher depreciation bases.

When this makes sense:

If your eenmanszaak has limited hidden reserves, the tax hit is small
The BV benefits from higher depreciation values (reducing future corporate tax)
You want a clean starting point