As an entrepreneur, you often start out as a sole trader. It’s accessible, flexible and fiscally attractive during the start-up phase. But as your business grows, the question arises: is it time to switch to a BV (private limited company)?
What is the tipping point?
The tipping point refers to the moment when switching to a BV becomes more advantageous from a tax perspective. In 2025, that point lies at an annual profit of around €120,000. Above that amount, you pay relatively high income tax in Box 1 as a sole proprietor. With a BV, you can pay yourself a customary salary and distribute profits through dividends, both taxed differently, and often more favourably.
Keep in mind that this is not a strict threshold. The actual tipping point depends on several factors, including:
- your personal financial situation (e.g. other income or deductions);
- how much profit you retain in the BV;
- how tax rates evolve in the coming years.
In previous years, the tipping point was closer to €150,000. But due to recent tax changes, the BV is becoming increasingly attractive, especially for self-employed professionals facing stricter regulations on false self-employment.
Why do entrepreneurs switch to a BV?
Tax benefits are just one part of the story. Entrepreneurs also make the switch to a BV for reasons such as:
- Limited liability: you’re generally not personally liable for business debts.
- Room for growth: hiring employees or attracting investors is often easier with a BV.
- Risk mitigation: a BV structure offers more protection when working with large contracts or financial risks.
- Professional image: a BV may enhance credibility with clients, partners or investors.
Curious about the benefits of a BV? Click here.
How does the switch work?
There are two ways to convert a sole proprietorship into a BV:
- Ruisend (with tax settlement): you sell your sole proprietorship to the BV and pay tax on any hidden reserves or goodwill.
- Geruisloos (tax-deferred): you transfer your business under certain conditions, without immediate tax settlement.
Which method is most suitable depends on your specific situation and future goals. We’re happy to help you weigh the options and choose the best route for your business.
Want more information on how a conversion works? Read all the information here.
What should you consider?
Switching to a BV brings more than just tax benefits, it also comes with additional obligations. For instance, a BV must file annual financial statements with the Chamber of Commerce. As a director-shareholder (DGA), you’re also required to pay yourself a minimum customary salary, which affects your salary administration and tax obligations.
A BV typically comes with higher fixed costs, such as notarial fees, payroll processing and more extensive accounting requirements. That’s why it’s important to consider the practical and strategic aspects alongside the financial ones. Is your business profitable enough to carry those costs? And do you have growth ambitions that would be better supported by a BV structure?
Is a BV the right move for you?
At Brand Boekhouders, we look beyond the numbers. We assess your full situation, help structure your business in line with your future plans, and guide you step by step through the transition. Whether you’re in a growth phase or already feeling the limitations of a sole proprietorship, we’re here to support you in making the right decision.
Schedule a free consultation through our contact page. We’ll take the time to explore your options and offer advice tailored to your goals.
