How it works
In a holding structure, the holding employs the DGA and lends the DGA to the operating company. The operating company pays the holding for this. That payment is the management fee. The two companies agree the amount, the hours and the notice period in a management agreement.
The fee must be at arm’s length. This means the price that two independent parties would agree. In practice, the fee covers the salary, the employer costs, a pension contribution and a margin. The operating company deducts the fee from its profit. The holding pays the salary from the fee and pays tax on what remains.
The fee is the price of a service between two companies, so the holding invoices it with VAT. The operating company deducts that VAT when it makes taxed supplies itself. Between companies in a VAT fiscal unity, the invoice is free of VAT.
If the operating company pays a fee far above the salary, it transfers profit to the holding. The tax authority checks this in an audit. Base the amount on the hours, the responsibility and the market rate for the role.
Example
The holding employs the DGA at a salary of €58,000. Employer costs and pension cost another €12,000. The holding charges the operating company a management fee of €84,000 a year plus VAT. The operating company deducts the €84,000 from its profit. The holding pays €70,000 in salary and costs and keeps €14,000 as profit. It pays 19% corporate tax on that profit.
The figures
Every rate for 2026 is listed in Netherlands tax rates 2026, and the figures for 2027 are in Netherlands tax rates 2027.
Questions people ask
Is a written management agreement required?
Yes. The agreement is the proof that the fee is for a real service at a real price. An auditor asks for this document first.
Can the fee change every year?
Yes, as long as the new fee matches the work and the market rate. Many owners set the fee once a year, together with the salary.
Holdwise, Hoofddorp. We keep this definition in line with our Dutch and German glossaries, and the figures are those for the tax year 2026. Updated 30 September 2026.
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