Year-End Tips 2024: 16 Tax Tips for the director—major shareholder (DGA)

1. Small-scale investment allowance (KIA)

Have you invested enough in assets in 2024 to qualify for the small-scale investment allowance (see the table below)? If not, there may still be some tax benefits to be gained! To qualify for this investment scheme, an investment must be at least € 450 excluding VAT. Also, you are able to  depreciate the invested amount annually.

Small-Scale Investment Allowance Table 2024

Note! Did you make an investment in a business asset in 2020 and claimed the small-scale investment deduction at that time? If you sell an investment within a five-year period, you must take into account a disinvestment addition. Consider postponing the selling this asset until 2025.

2. Invest in energy-efficient business assets in 2024

Do you have plans to invest in a business asset listed on the energy list of the Dutch enterprise agency (RVO), soon? Assess whether this asset is also included on the Energy List for 2025. If not, it may be beneficial for tax purposes to invest in 2024. This means that, for example, you need to sign an engagement letter or order confirmation this year. However, you must ensure that the energy investment is reported to the RVO on-time to claim the energy investment deduction and the environmental investment deduction.

3. Buy a delivery van without BPM-tax

Until the end of 2024, you can still benefit from the BPM-tax exemption when purchasing a new delivery van for business usage (the van must be used for at least 10% of the time for business activities). This exemption will expire in 2025. As of 2025 delivery vans will be subject to the same tax treatment as passenger cars. Investing in 2024 can save you thousands of euros. If you buy a CO2-free delivery van in 2025, you will still not have to pay BPM-tax.

4. Terminating fiscal unity by December 31, 2024

If you would like that your entities will no longer be part of a fiscal unity for corporate income tax as of January 1, 2025, the request for ending of the fiscal unity must be submitted before December 31, 2024. In certain cases, this can be advantageous when there are multiple profitable companies within a fiscal unity. This allows the companies to individually benefit from the lower ‘SME bracket’ in the corporate income tax. The rate difference between the first tax bracket up to € 200,000 (19%) and profit exceeding that amount (25.8%) is 6.8%.

The ending of a fiscal unity can also result in the possibility to apply or increase small-scale investment allowance.

Of course, there are also disadvantages to not being part of a fiscal unity for the corporate income tax. Consider these pros and cons with an advisor before proceeding with an ending of this fiscal unity. In case a fiscal unity is formed during 2024 and terminated before the end of 2024 this will result in a situation that this fiscal unity never existed.

Note! Consult with your advisor regarding any potential tax risks that may come into effect due to the termination of the fiscal unity.

5. Take full advantage of the lowest tax bracket for the corporate income tax

Keep your BV’s profit below €200,000 to benefit from the low tax bracket of 19%. Check where you can forward costs and defer revenues to save on corporate income tax. For example, by using the cost equalization reserve (KER), the reinvestment reserve (HIR), provisions, or early depreciation.

6. Reduce tax interest

The tax interest rate for corporate income tax the Dutch Tax Authorities apply on the amount of taxes due is very high (10% in 2024, 9% in 2025). Prevent the Tax Authorities from charging unnecessarily high interest by submitting and paying a preliminary assessment Dutch corporate income tax on-time. Has your company (BV) performed better than expected in 2024? If the (provisional) annual figures shows that the BV will need to pay an additional amount of corporate income tax for 2024, we advise you to request for an (adjustment of the) preliminary assessment Dutch corporate income tax for 2024.

Note! Recently, a Dutch lower court ruled that the calculated tax interest is not proportional and the amount of tax interest due of 8% should be reduced to 4%. We advise you to file an appeal against the tax interest stated on the tax assessment. In case of a definitive assessment, the appeal must be submitted within six weeks of the date on the assessment. For a preliminary assessment, you must first submit a request for an amendment of the calculated tax interest. This request needs to be send to the Dutch Tax Authorities within six weeks after the date on the definitive assessment for that tax year. Of course, we are happy to assist you in preparing such a request for an amendment or an appeal.

7. Take out dividend income in 2024, or wait for next year?

As of January 1, 2025, the highest tax rate in Box 2 (taxable income from substantial ownership), which includes dividend income, will change. For dividend income up to the amount of the first bracket of € 67,804 (for fiscal partners € 135,608), the tax rate of 24.5% will still be applicable. In case of dividend income above this amount, this exceeding amount will be taxed against 31% (33% in 2024).

8. Borrowing money from your private limited company (B.V.), including current account and excessive lending

As a director-major shareholder (DGA), you can finance your investments with a loan from your own B.V. The loan, like the investments, are part of your Box 3. Borrowing of money from your B.V. must take place under businesslike terms, and a part of this is a written agreement. Discuss with your advisor which other conditions you need to agree upon. If the loan is related to your primary residence, under conditions the paid interest is tax deductible in private if the loan qualifies as a primary residence mortgage in Box 1 based on the Dutch tax law.

Do you, as a DGA, have a consistently high current account with your B.V.? There is a possibility the Dutch Tax Authorities will take the stance that (a part of) the debt needs to be regarded as dividend income and that they will make an adjustment, potentially even increased with a penalty. You can reduce this risk by ensuring there is a proper documentation.

Note! In recent years, the Dutch Tax Authorities pays a lot of attention to loans between companies or with its owner. If the loan and the conditions are not businesslike, the loan can be considered as non-businesslike (i.e. in case of (too) low interest rates, no repayment schedule agreed upon or if insufficient securities has been provided to the creditor etc.). If the loan is not businesslike, a loss on that loan is not tax deductible.

Note! Are you borrowing money from your BV? You may then be faced with the excessive lending bill. In the opinion of the legislator director-majority shareholders (DGA’s) are borrowing too much from their own BV’s and he wants to limit this. However, there is a certain threshold amount, and only debts above this amount are considered excessive. The excessive part of the loans is then taxed in Box 2 at the applicable rates. For 2023, the threshold amount was € 700,000. However, for tax year 2024, the threshold amount has been reduced, and together with your fiscal partner, you can borrow a maximum of € 500,000 tax-free from your own company under this law.

Loans used for the purchase of a primary residence are exempt and are not included in the threshold calculation. The reference date for 2024 is December 31, 2024. You have until this date to reduced your outstanding debt amount above the threshold. Any amount above the threshold will be taxed at the Box 2 tax rate of 24.5% or 33%—depending on the amount—as if you received dividend income.

Tip! It is currently unclear whether the excessive lending law conflicts with European law. It may be advisable to file an appeal against the definitive assessment in which the fictitious income due to excessive lending is included. Consult with your HBK advisor to determine whether filing an appeal is worthwhile. Do so within six weeks after receiving the definitve assessment.

9. Provision

If you want to defer profits, consider whether you can create a provision. It is sufficient for this purpose that future expenditures have their origin in facts and circumstances that occurred before the balance sheet date, and that there is a reasonable degree of certainty that the expenditures will be made in the future. Furthermore, future expenditures must also be attributable to the period preceding the balance sheet date. Possible provisions are for example, restructuring, maintenance, remediation costs, providing guarantees on products, or anniversary expenses for employees.

10. Final wage tax return 2024

Verify whether all payments made to your employees have been correctly accounted for. Also consider aspects such as fictitious additions for a company car and/or vans, as well as other favorable forms of compensation.

11. Make full use of the possibilities within the work-related cost scheme (WKR)

For 2024, optimize the possibilities within the work-related cost scheme. Up to a wage sum amount of € 400,000, the free space is 1.92%, but in 2025 it will be increased to 2%. For the exceeding amount, the free space in 2025 remains 1.18%, similar to 2024.

Tip! Evaluate whether you still have any remaining free space in 2024 and consider whether items you plan to reimburse or provide in 2025 can possibly be reimbursed or provided in 2024.

12. Tax-free travel expense reimbursement

If you do not provide a vehicle to your employee, but your employee travels for work, you can reimburse a maximum of € 0.23 per km tax-free to your employee. It does not matter how the employee travels. This applies to both commuting as well as business travel. For public transport, you may also reimburse the actual costs. The amount of the tax-free reimbursement will remain € 0.23 per km in 2025.

13. 30% ruling from 2025

.Employees who are recruited from outside the Netherlands to work in the Netherlands often incur double costs (so-called extraterritorial costs). Under certain conditions, an employer may reimburse these costs tax-free. This can be done on an expense reimbursement basis, where the actual costs are reimbursed. However, it is simpler (and often more advantageous) to reimburse 30% of the total salary tax-free (without further proof).

From 2024, the 30% ruling can only be applied up to the so-called “Balkenende norm” (2024: € 233,000, 2025: € 246,000). On the exceeding amount, the 30% ruling can no longer be applied. However, it is still possible to reimburse the actual costs instead of using the 30% ruling. Both the 30% ruling and the reimbursement of actual costs have a maximum duration of five years (previous periods of stay in the Netherlands may be deducted from this period). Additionally, the actual costs for an international school can still be reimbursed alongside the 30% ruling.

Note! Request for the 30% ruling within four months after starting employment so that the ruling can be applied retroactively to the date the employee started his or her employment. If the request is sent to the Dutch Tax Authorities too late, the 30% ruling may not be applied retroactively and can only be applied from the first day of the following month the request has been submitted. 

Tip! When changing employers, there is a right to continue the 30% ruling. There must be less than three months between the two employments. Continuation can also be requested within four months after the start of the new employment relationship.

Reduction of the 30% ruling

The amendments approved by both Houses in December 2023, which adjusted the 30% ruling to a 30-20-10% scheme, have been reversed. The 30% ruling will be replaced in 2027 by a general reduction of 3%. For 2025 and 2026, the maximum rate of 30% will still be applicable. However, the minimum salary threshold will be increased from € 46,107 (2024) to € 50,436 in 2027. For incoming employees under the age of 30 years with a master’s degree, the salary threshold will increase from € 35,048 (2024) to € 38,338 in 2027. The mentioned income adjustments is besides the regular annual inflation correction

Note! For employees for whom the 30% ruling was applied before 2024, the 30% tax free allowance and the current (indexed) salary thresholds will continue to be applicable for the entire duration of the ruling.

Unfortunately, the amendment that abolishes the partial non-resident tax liability from 2025 remains in effect. Employees with the 30% ruling can opt to be treated as a partial non-resident for tax liabilities in his or her  Dutch income tax return. Even though they lived in the Netherlands, they were considered foreign tax residents for Box 2 and Box 3, meaning they only had to report Dutch investment property in Box 3 and were not liable for Dutch taxes on their (worldwide) bank and savings accounts or shares. Inform newly arrived employees about this change. If an employee has already benefited from the 30% ruling in 2023, a transitional law has been made. For this group of employees, the partial non-residency tax liability will remain in effect until December 31, 2026.

14. Last VAT Return of the Fiscal Year 2024

When preparing the final VAT return for the year 2024, please consider the following points:

Adjustments related to private usage:

• Correction of VAT for private use of a car (both for you as an entrepreneur as well as your employees).
• Correction of VAT for private use, for example, gas, water, electricity, and heating.
• Correction of VAT for personal usage of goods belonging to the business for purposes other than businesslike (including private use, such as assets used for both business and personal purposes).
• Correction of VAT for services provided by you as an entrepreneur for purposes other than business (including private usage).
• Correction within the framework of the company canteen scheme.
• Other corrections on the deduction of prepaid taxes on distributions to employees (providing opportunities for sporting or recreation, private transportation, and housing), as well as for business gifts and similar items.

Pro-rata-related adjustments:

• Entrepreneurs who do not exclusively provide VAT-taxed services must calculate the pro-rate deduction percentage for the past year. This may result in an adjustment (upwards or downwards) of the previously deducted VAT on general costs.
• If the pro-rate deduction percentage falls below 90% (or 70% for, among others, travel agencies), you must assess the implications for possible ‘optional taxed rental’ in rental contracts.
• Revision of prepaid tax on movable and immovable investment goods.

In some cases, under conditions, it has been approved that corrections can be made at the end of the calendar year (if the calendar year is not the same as the fiscal year).

Deadline for reclaiming foreign VAT:

Are you economically active in multiple EU countries? Dutch entrepreneurs who have tax deduction entitlement can reclaim VAT paid in other EU countries through an electronic request with the Tax Authorities. Note that separate login details are required for this, and the application process may take several weeks. The request must be submitted no later than September 30th of the year following the year for which you are reclaiming VAT. Received requests after this date may not be taken into account by the other EU country.

15. Does a debtor not pay your invoices? Request for VAT refund in a timely manner

If a debtor does not pay your invoice, you may, under certain circumstances, request for a refund of the VAT you have already paid to the Tax Authorities.

Please note! If you make arrangements with your debtor regarding the payment of your invoice(s), your claim may be converted into a loan. In that case, you cannot submit a refund request to the Tax Authorities. Before proposing a payment scheme, make sure to carefully assess whether your debtor will ultimately fulfill its obligations or not. Ultimately, one year after the claim became due and payable, it is assumed that the debtor will not pay your invoice, and you must request the VAT refund.

You must submit the refund request in a timely manner. This means within one month after it becomes clear that your customer will not pay your invoice.

16. Retention obligations

Cleaning up and destroying old administrative records can certainly result in cost savings, but keep in mind the legal retention period of at least seven years for your administrative data. Regarding real estate and the rights subject to it, you must keep the VAT administration for ten years.

For VAT, there is a special retention obligation in certain cases (for ten years). Permanent documents (deeds, pension and annuity policies, etc.) should not be discarded.

Tip! If you store the data from sales receipts digitally and are able to make it available for the Tax Authorities, it is no longer necessary to keep paper receipts, cash register rolls, and similar information. This also applies to invoices, provided that no information is lost during scanning.

Disclaimer

While utmost reliability and care have been aimed for in the compilation of the Year-End Tips 2024, this version has been put together based on knowledge up to November 11, 2024. We have assumed that the Senate will approve the Tax Plan 2024 and the adopted amendments. Our organization cannot be held liable for any inaccuracies and their consequences.

More Year-End Tips 2024

For Directors/Major Shareholders (DGAs)
For the Self-Employed Entrepreneurs
For Private Individuals