When is it worth switching to a BV?

A question that arrives once your freelance business is thriving: should I move from a sole proprietorship (eenmanszaak) to a private company (BV)? The short answer is that there's a profit threshold where it makes financial sense—but "makes sense" depends on more than tax alone. This guide walks through the numbers, the mechanics, and the hidden costs.

The trade-off in one sentence#

As a sole proprietor, your business profit is taxed as personal income (box 1), and you get entrepreneur deductions. As a BV owner, the company pays corporate tax (vennootschapsbelasting), and you personally pay income tax only on what you withdraw—but you lose most entrepreneur deductions.

The advantage of a BV shows up when your profit is high enough that the combined BV and dividend tax is lower than the personal income tax you'd pay as an eenmanszaak.

The break-even profit level#

Here's the crux: at what profit does a BV beat an eenmanszaak?

The answer is roughly €90,000–€100,000 annual profit—but this is not a hard line. It depends on several factors:

• Your personal tax bracket (top rate is 49.5%, but thresholds vary by year)
• Whether you claim all your entrepreneur deductions (zelfstandigenaftrek, startersaftrek, MKB exemption)
• How much you withdraw from the BV vs retain in the company
• Whether you use a gebruikelijk loon strategy (paying yourself a salary)

The hedge: Check belastingdienst.nl for the exact current corporate tax rates (roughly 19% up to a threshold, then 25.8% above). Your situation may differ, so always run the numbers with a tax adviser before deciding.

The tax structure for a BV#

When you operate as a BV:

1. The company earns a profit and pays corporate income tax (vennootschapsbelasting) at roughly 19% (lower band) or 25.8% (higher band).
2. After tax, you can either retain profits in the company or pay them out to yourself as dividends.
3. Dividends you receive are taxed as personal income (box 2 for most BV owners) at a flat 37.71% (or sometimes a lower rate under certain conditions; check current law).

This two-layer tax structure is what creates the advantage at higher profit levels. The effective rate can be lower than paying personal income tax on the whole amount.

But here's the cost: you lose the entrepreneur deductions. No zelfstandigenaftrek (worth €1,200–€2,470 depending on the year), no startersaftrek, no MKB-winstvrijstelling. That's thousands of euros per year in lost tax breaks.

What changes when you switch#

The mechanics:

• You form a new BV (kosten: roughly €900–€2,000 in legal/admin fees).
• You transfer your client relationships, assets, and goodwill into the company (this is complex and has tax implications; you'll need a lawyer/accountant).
• Your personal tax changes from sole proprietor to BV owner.
• You must file annual accounts and tax returns for the company (adds €1,500–€3,000+ in accountant fees per year vs a simpler eenmanszaak).

The governance:

• The company has a board, articles of association, and legal formalities. As a one-person BV, you wear the hat, but the obligations remain.
• You keep more detailed records (required by law).
• Liability is somewhat limited: if the company fails, creditors can't come after your personal assets. (This is a genuine advantage in high-risk professions, less so for freelancers.)

The accountant bill: a big hidden cost#

A solo eenmanszaak with straightforward books might cost €500–€1,500 per year in accountant or bookkeeper fees (or you do it yourself with software).

A BV with statutory accounts, tax returns, and audit obligations easily costs €1,500–€3,500 per year. Over five years, that's €7,500–€17,500 in extra admin costs. That shrinks the tax advantage significantly.

• Calculate your profit accurately (include all deductions and costs)
• Get a rough comparison: eenmanszaak tax vs BV corporate + dividend tax
• Account for the accounting/admin cost difference
• Consider your risk profile: do you need liability limits?
• Consult a tax adviser (budget €300–€600 for a proper calculation)

The non-tax reasons to consider a BV#

While tax is often the trigger, some freelancers switch for other reasons:

Liability protection. If your work carries high risk (construction, property development, health services), a BV shields your personal wealth. For low-risk consulting or freelancing, this is a weak argument.

Simplicity of ownership. If you plan to bring in a partner or investor later, a BV is easier to structure. An eenmanszaak partnership (VOF) is fine for many cases, but a BV is clearer for formal ownership stakes.

Credibility. Some clients prefer working with a "company" rather than an individual—it's a soft advantage, not a tax one.

Future hiring. If you're adding employees, a BV can feel more scalable and professional, though an eenmanszaak can hire too.

The decision checklist#

1. Is your profit roughly €90k+? If not, stop here—eenmanszaak wins.
2. Will you really claim all deductions? If you're lazy with records, the BV's lower overhead might appeal, but the math still favours eenmanszaak.
3. Have you factored in the accountant cost? This often shrinks the tax advantage by a quarter.
4. Is there a non-tax reason? Liability, partnership plans, or risk appetite might matter.
5. Have you run the real numbers with a tax adviser? This is not a DIY decision—one hour of professional advice costs €300–€600 and saves you thousands.

When you do switch: what's involved#

If you decide to go ahead:

• Consult a tax adviser and lawyer (not optional—the transition is complex).
• Plan the timing around the tax year so you don't double-file or confuse quarters.
• Transfer assets carefully—a sloppy handover can trigger unexpected tax bills.
• Notify clients and suppliers (update your BTW-id, invoicing details, contracts).
• Wind down the eenmanszaak formally (or if you keep it, separate it clearly).

The process takes 2–3 months and costs €2,000–€5,000 in legal/accounting fees. Add it to the ongoing higher accountant costs, and the break-even is even higher than the simple tax calculation suggests.

Frequently asked questions#

The BV switch isn't inevitable, and it's not a tax hack. It's a business decision that makes sense at a certain profit level, but only if you factor in the true costs and get proper advice. Many successful freelancers stay as eenmanszaken because the admin burden and cost exceed the tax saving. Others grow into a BV when the numbers clearly justify it. Let the numbers guide you—and get a second opinion before you move.

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