How can I convert my business into a bv?
There are multiple ways to convert your business into a bv. In most cases, businesses opt for a so-called ‘silent transfer’. This means that the sole proprietorship is converted into a bv without being subject to tax. An additional advantage of this type of conversion is that the Dutch Tax and Customs Administration can retroactively grant the transition from January 1st, so that the company is treated as a bv for that entire fiscal year.
In addition to a silent transfer, there are several alternative ways to convert your business into a bv. Which method is best for you totally depends on your situation. We’re more than happy to discuss this with you personally.
What does the conversion of my business to a bv cost?
In case of a silent transfer, we charge a one-time fee of €2,000 to oversee the transfer. When you close your sole proprietorship, tax may be due on the so-called discontinuation profit. To prevent this from happening, it’s highly recommended to agree in advance with the Dutch Tax and Customs Administration that the conversion is subject to a silent transfer. As a result, the conversion will not lead to taxation, and the business will be retroactively regarded as a bv from 1 January. This means that you reap the benefits of being a bv throughout the current year. Kees de Boekhouder can handle the coordination with the Tax Authorities on your behalf.
As soon as the (silent) transfer is approved by the Dutch Tax and Customs Administration, the bv can be established by a civil-law notary and the company can be converted. Please note that the costs for the notary are not included in our fee for supervising the transfer
How long does the conversion to a bv take?
The process of converting into a bv consists of various steps. First of all, you must sent a letter of intent to the Dutch Tax and Customs Administration before 1 October. This secures the retroactive transfer from January 1st. As soon as your income tax return for the previous year has been completed, we can also send the actual request to the Tax Authorities. In this request, we explain that the conversion can take place without taxation.
Please take into account that it may take some time (approximately eight weeks) before the Dutch Tax and Customs Administration responds to this request. As soon as the silent transfer has been approved by the Tax Authorities, you can make an appointment with the civil-law notary. In total, the process will take several months. Due to the retroactive effect of the conversion, your business will, from a tax perspective, operate as a bv for the entire current year. Please note that the silent transfer must be completed within fifteen months at the latest. In the event of a silent transfer with retroactive effect to 1 January 2024, this means that the sole proprietorship must be transitioned into the bv by the civil-law notary no later than 31 March 2025.
Do I need to contact a civil-law notary to carry out the conversion, or will Kees de Boekhouder do this for me?
We kindly ask you to contact a civil-law notary of your choice to set up the bv and transfer the sole proprietorship into it. However, we’re more than happy to take a look at the various documents that the notary will draw up to set up the conversion, and discuss these with the civil-law notary if necessary.
Will a single bv be sufficient, or do I also need to set up a holding company?
A holding company can offer certain advantages, for example if there are significant risks to your business, or if there’s a desire to sell the company or to have new investors join in the future. An important disadvantage of a holding company is the fact that you’ll need to set up at least two bvs, which means that the start-up and annual costs will be considerably higher. We’re more than happy to discuss whether a holding company structure offers advantages in your situation.
I’m currently a client at Kees de Boekhouder. Can I continue to do my administration with Kees de Boekhouder during the conversion process?
Up to the moment that the bv has actually been established by the civil-law notary, Kees de Boekhouder will take care of your administration. Once the conversion has been completed, your administration can be transferred to Founders, the sister company of Kees de Boekhouder. Since Kees de Boekhouder and Founders work together a lot, and use similar accounting systems, this transition will be relatively easy. After the conversion, you’ll be assigned a bookkeeper from Founders who will take care of your accounting from that moment on.
Are there any matters that need to be arranged after completion of the transition?
Although the company and all associated assets and debts have been legally transferred to the bv by the notary, it’s important to communicate the new business form of your company to third parties. The name of the business bank account must be changed, for example. All parties with whom the company is working must be informed that the name of the company has changed and that a new Chamber of Commerce and VAT number is being used
I’ve received a provisional assessment for my income tax, but I’m still in the process of converting my business into a bv. Can I have the assessment changed?
Because the Dutch Tax and Customs Administration bases its provisional assessment on data from previous years, you may receive a provisional assessment based on the data of the sole proprietorship while you’re converting the company into a bv. In this case, you can ask your bookkeeper to have the amount of the provisional assessment lowered, as the income tax that needs to be paid may be lower due to the fact that the company is being converted into a bv.
In the past I’ve accrued a tax retirement reserve (‘FOR’) in my company. Can the FOR also be transferred to the bv?
No, unfortunately the FOR may not be transferred to the bv. As a result, the accrued amount of the FOR is, in principle, included in your profit in the year of the conversion. You have the option to enter into an annuity obligation with your own bv, so that the release of the FOR does not lead to tax paid on balance. We would be happy to discuss with you whether this is a good option for you.
