How it works
A sole trader pays income tax in box 1 on the whole profit, after the self-employed deduction and the SME profit exemption. A BV pays corporate income tax on its profit, and the owner pays box 1 on the salary and box 2 on the dividend. At low profit the sole trader pays less. At higher profit the BV pays less. The profit level where both are equal is the break-even point.
The owner can change the break-even point with two choices. Profit that stays in the BV is taxed only at 19%. The more the owner reinvests or saves in the company, the lower the break-even point. With a high salary, the break-even point is higher, because salary is taxed like employment income.
The costs of a BV also count. These are the annual accounts, the payroll for the DGA and the corporate tax return. We include these yearly costs for a holding with an operating company in the benchmark.
The Holdwise Threshold is the yearly benchmark for this point. For 2026 the BV with holding is more favourable than the sole proprietorship above a certain profit level. If the profit stays in the holding, that level is about €78,000 to €88,000. If everything is paid out privately, it is about €113,000 to €149,000, around €127,000 in the mid scenario.
Example
A consultant makes €110,000 profit and needs €60,000 to live on. As a sole trader, she pays income tax on the whole €110,000. With a holding and an operating company, she pays herself €58,000. The company pays 19% on the rest, and she keeps the remaining profit in the holding. Her total tax bill is several thousand euros lower. The difference becomes larger every year that she keeps the profit in the company.
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
Does the break-even point change in 2027?
Yes. The self-employed deduction falls to €900. Under the proposal, the starter’s deduction drops to €10. As a result, the break-even point is lower. We publish the 2027 benchmark when the Tax Plan becomes law.
Is tax the only reason to choose a BV?
Liability, a later sale, investors and an international customer that requires a company are also reasons. For many founders, these reasons come before the tax difference. They choose a BV even below the break-even point.
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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