How it works
Dutch company law protects creditors through the board. Before a BV pays dividend, repays share premium or buys back shares, the board must approve the payment. It approves only when the company can keep paying its debts as they fall due in the period after the payment, usually about a year.
The board looks forward: expected cash flow, loans that come due, the lease, taxes, salaries and known risks. A payment that would leave the company short is refused, even when the balance sheet shows a profit.
The balance test comes first: equity must stay above the reserves the law and the articles require. The distribution test comes second and looks at cash. Both are documented in a board decision.
A board that approves a payment while it knew or should have known that the company would fall short on its debts is personally liable for the shortfall. A shareholder who received the payment in bad faith must return it. That is why the tests matter, also in a one-person BV.
Example
A BV shows €80,000 profit but has a €60,000 tax assessment due in three months and a slow quarter ahead. The director approves a dividend of €20,000 and records why, with a cash forecast. The remaining €60,000 stays in the company for the assessment.
The figures
All 2026 figures: Netherlands tax rates 2026 · the 2027 figures: Netherlands tax rates 2027.
Questions people ask
Is the test needed in a one-person BV?
Yes. The law applies to every BV. The director records the decision and the reasons; it takes ten minutes and protects the director personally.
Does the test apply to interim dividend?
Yes, to every distribution: interim dividend, final dividend, repayment of share premium and share buy-backs.
Holdwise, Hoofddorp. Definition and explanation maintained with the Dutch and German glossaries; figures from the central rates source, year 2026. Updated 16 September 2026.
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