Christmas 2021 is just around the corner. Many entrepreneurs are – unfortunately forced – already free. Now that there may be some time left, it is wise to get your (fiscal) affairs in order so that you can end 2021 well or start 2022 well. Therefore, here are a few end-of-year tips.

Year-end tips 2021 for BV

  1. Salary or dividend: have a calculation made of what is advantageous, paying out a dividend or reducing/increasing your salary. If you have made use of the NOW scheme, you may not be allowed to pay out a dividend in 2021.
  2. Gifts: BVs can benefit from the gift deduction. The deduction in the PLC is up to 50% of the taxable profit. The maximum is € 100,000 per year. An extra favourable arrangement applies to donations to cultural institutions, which may be increased by 50% (maximum €2,500).
  3. Breaking the fiscal unity: Sometimes it is advantageous to break the fiscal unity for the VPB because of the step-up rate. The profit is taxed at a rate of 15% up to € 245,000, and you must pay 25% corporation tax on the excess. As from 2022, the step-up rate will be even higher (€ 395,000); the surcharge will be 25.8%. Breaking up a fiscal unity can therefore sometimes yield a considerable advantage (in 2022 10% of € 395,000 = € 39,500).
  4. In 2021, make full use of the increased Work-related Costs Regulation (WKR) to provide yourself or your staff with tax-friendly remuneration. In 2021, the WKR will be 3% over the wage bill up to € 400,000. From 2022 the percentage will be 1.7% of the wage bill up to € 400,000. Above € 4,000 the percentage is 1.18%.
  5. Borrowing from your private limited company: a business agreement with security and a business interest rate must be agreed (with minutes). In 2023, a maximum of € 700,000 may be borrowed from your PLC (with the exception of loans for an own home). The tax authorities have been checking this more frequently since 2021.
  6. Claim on your PLC: If a DMS has a claim on his PLC, interest must be calculated on it. This interest is taxed in Box 1 and is deductible for the PLC, which is unfavourable from a tax perspective. There is an exception for claims up to € 17,500.
  7. Guarantee commission: if the DMS has guaranteed himself in private for financing to the PLC, then a guarantee commission must be paid by the PLC to the DMS (taxed in box 1, so usually not favourable). If you do not do this, the tax authorities can correct this (for 5 years). If the DMS is approached privately for the loan from the PLC, then this is normally deductible in Box 1. If no guarantee fee is paid, the loan is (usually) not deductible.
  8. Dividend distribution: perform a distribution test if your PLC is going to distribute dividends. Otherwise, there is a risk that a dividend payment may have to be repaid and/or the DMS may be held personally liable.
  9. Business succession: consider a business succession with your family. You can transfer your business (tangible company) almost tax-free to your children. If you have sold your company, you may owe 30 – 45% in taxes (box 2 and gift tax). Via the business succession scheme, the rate is only 5%.
  10. Loss evaporation: avoid loss evaporation. A loss in 2021 can be set off against the profits of 2020 and the profits of 2022 up to and including 2027. From 2022 onwards, losses are not lost, but less can be set off.
  11. If your shop or organisation has already closed: count your stocks, count your cash and already arrange the financial administration for your advisor so that he can quickly take care of the VAT declaration for the last period. You may be entitled to a refund.
  12. Do you have employees and a lower turnover in November and December 2021? Check whether you qualify for the corona allowance NOW 7th tranche. The application period is open until approx. the end of January 2022.
  13. Do you have fixed costs and a lower turnover in the 4th quarter 2021 compared to the 4th quarter 2019 or 1st quarter 2020? Check whether you qualify for the corona measure TVL (Tegemoetkoming Vaste Lasten). The application period for the 4th quarter 2021 is open until approximately the end of January 2022.

End-of-year tips 2021 for entrepreneurs (sole trader, general partnership)

  1. Start-up entrepreneur: you can write off purchased assets arbitrarily, take out death risk insurance, keep track of hours and set aside money for your tax liability.
  2. Adjust provisional assessment: check whether your provisional 2021 income tax assessment is too high or too low. Adjust it if necessary. If the assessment is too low, you run the risk of having to pay tax interest.
  3. Allocation fiscal old age reserve: To be able to donate to the fiscal old age reserve (FOR), your business assets must be high enough. Your assets at the end of 2021 must be equal to the FOR at the end of 2020 + addition 2021. The FOR is an amount that you can deduct from your income, it does not have to be paid to a third party. You do have to put this amount aside for later. The maximum donation is € 9,395.
  4. Incorporating your personal income tax company into a private limited company (BV): a BV is becoming increasingly attractive and this also avoids the risk of liability for your private assets (separation of business assets and private assets). The self-employed tax deduction is currently € 7,030; in the coming years this will be reduced to € 3,240. The rate for the BV continues to decrease; up to a profit of € 395,000 the rate is 15%. More and more entrepreneurs are bringing their company (tax-free) into the PLC.
  5. Remuneration of collaborating partner: There are several options for this, including (a) the collaboration deduction (if your partner has received no remuneration) or the (b) collaboration bonus (minimum € 5,000). The reward is deductible from the profit and often tax-free for your partner. If the remuneration is lower than € 5,000, it is not deductible and your partner will not be taxed. Finally, you can consider (c) entering into a VOF with your partner. This can provide progression benefits.
  6. The self-employed tax deduction is € 6,670 (in 2022 € 6,310). For this, you must meet the so-called hour criterion of 1,225 hours per year. If you do not meet this criterion, you are not entitled to the self-employed tax deduction, the partnership tax deduction and the FOR.
  7. Points 11 to 13 of the year-end tips for the private limited company also apply to entrepreneurs.

For questions, assistance or explanation of 1 of the above tips, the advisors of AAme Advisors are happy to help. Finally, we wish you a merry Christmas and a healthy and successful 2022.

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