Tax-neutral conversion of your sole proprietorship
With a tax-neutral conversion (geruisloze inbreng) you roll the tax claim forward instead of settling it now. Whether that is the best route in your case depends on your figures - we calculate that first.
What you can expect from us
- One fixed monthly fee, excl. VAT - no additional billing afterwards
- VAT, corporate income tax and filing all monitored
- One permanent contact person with management experience
- We arrange the switch with your current firm
Arranged in 3 steps
You request the quote
You tell us what your BV looks like: holding structure or not, number of invoices, payslips. Within one working day you have a fixed monthly fee.
We collect your records
Agreed? Then we contact your current firm and arrange the handover. All you provide is your approval, nothing else.
Your bookkeeping continues
From that moment on we monitor the tax returns and the filing. You always speak to the same finance professional and know every month what you pay.
What is a tax-neutral conversion and why choose it?
If you are considering converting your sole proprietorship (eenmanszaak) into a BV (the Dutch private limited company), the first question is how to do this in the most tax-efficient way. On the overview page Converting a sole proprietorship into a BV: when and how you can read which routes exist and what determines the decision. This page goes deeper into one specific route: the tax-neutral conversion of a sole proprietorship into a BV.
With a tax-neutral conversion you transfer your sole proprietorship into a newly incorporated or existing BV without paying tax at that moment on the hidden reserves, the goodwill and the tax-deferred reserves in your business. The tax claim does not disappear, it moves across to the BV. That is the essence of the Dutch word 'geruisloos' (silent): the conversion passes the tax authority inaudibly, as it were, without immediate settlement.
The alternative is the taxable conversion (ruisende inbreng). With a taxable conversion of your sole proprietorship into a BV you do settle at the moment of transfer. You then immediately pay income tax on the added value in your business. That can be attractive if that added value is limited or if you have losses you want to offset. So the difference between a taxable and a tax-neutral conversion depends heavily on the hidden reserves, goodwill and reserves in your business. A conversation about your situation is essential for this; we do not give tax advice on a personal situation without that advisory meeting.
The tax-neutral conversion is laid down in article 3.65 of the Dutch Income Tax Act 2001 and elaborated in the decree on tax-neutral conversion. Standard conditions are attached to that decree: a set of requirements that both the conversion itself and the ongoing operations in the BV must meet. The tax authority tests against those standard conditions before granting approval.
Conditions, step-by-step plan and costs of the tax-neutral conversion
The conditions for a tax-neutral conversion are strict. The main ones: you run the business as a sole proprietorship or a general partnership (vennootschap onder firma, VOF; a tax-neutral conversion of a VOF into a BV largely follows the same rules), you transfer the entire business, the BV continues the activities, and you submit a formal request for tax-neutral conversion to the tax authority. That request is accompanied by a declaration of intent and a description of the assets contributed. In that description you set out which assets and liabilities are transferred and at what value. A sample description is not enough; every case requires a tailor-made document that matches your balance sheet and the standard conditions.
One of the most attractive features is the retroactive effect of the tax-neutral conversion. You can have the conversion take effect for tax purposes as of 1 January of the current or the previous year, provided you submit the request in time. In practice this means you can set up a BV in 2026 while the books of the BV already run from 1 January 2026 for tax purposes. The deadline is hard: if you submit the request too late, the retroactive effect lapses and you cannot get it back. The tax authority applies a period of three months after incorporation of the BV, but in practice the clock already starts running at the moment of the declaration of intent. Also bear in mind the three-year period for a tax-neutral conversion: for three years after the conversion, additional restrictions apply to the disposal of shares. If you sell the shares within that period, this can lead to a higher tax charge.
There is often confusion about goodwill in a tax-neutral conversion. The goodwill is not taxed immediately in a tax-neutral conversion, but the tax claim moves across to the BV. That has consequences for the depreciation position and the deferred tax liability in the BV. This is exactly where a pitfall lies: if the description of the assets contributed values the goodwill too low or too high, the tax authority can correct this afterwards. A sound description is not a formality.
Do you want to transfer the business into an existing BV? That is also possible. A tax-neutral conversion into an existing BV involves additional points of attention, among other things around the relationship between the value contributed and the equity position already present in that BV. The tax and legal treatment differs in parts from a conversion into a newly incorporated BV.
The costs of a tax-neutral conversion into a BV consist of several parts. There are notary fees for incorporating the BV and recording the transfer; that part is outside our scope, because we do not handle notarial deeds. What we do handle: the declaration of intent, the description of the assets contributed, the request to the tax authority, guidance through the approval process and the full reconciliation of the opening balance sheet of the BV. After that, the fixed monthly bookkeeping takes over. What that monthly fee is for your situation, we calculate for you within one working day after you request a quote. All amounts are excluding VAT.
The step-by-step plan for a tax-neutral conversion into a BV looks as follows in practice. First we map out your current figures and the equity of your sole proprietorship. Then we draw up the declaration of intent and submit it to the tax authority; that marks the start date for the retroactive effect. Next we work out the description of the assets contributed, we guide you to the notary for the incorporation of the BV, and we make sure the formal request for the tax-neutral conversion is complete and with the tax authority on time. After approval we prepare the opening balance sheet of the BV and the regular bookkeeping starts. Would you first like to know whether a BV makes sense in your situation at all? Then also read BV or sole proprietorship: break-even point and comparison, and Converting a sole proprietorship into a BV: steps and costs, or schedule a free 30-minute introductory call right away.
FAQ
Frequently asked questions
What is the difference between a tax-neutral and a taxable conversion?
With a tax-neutral conversion, the tax claim on hidden reserves, goodwill and tax-deferred reserves moves across to the BV; at the moment of transfer you pay no income tax on that added value. With a taxable conversion you do settle with the tax authority straight away. Which route is more favourable depends on the size of the added value in your business, any losses you can offset and your personal situation. We advise on this in an introductory meeting.
How does the retroactive effect work with a tax-neutral conversion?
You can set the tax effective date of the conversion back to 1 January of the current year, provided you submit the declaration of intent to the tax authority in time. So in 2026 you can have the BV take effect for tax purposes as of 1 January 2026. The deadline is strict: once the declaration of intent is late, the option of retroactive effect lapses permanently.
What is the three-year period in a tax-neutral conversion?
For three years after the conversion, additional restrictions apply. If you sell (part of) the shares in your BV within that period, this can lead to a higher tax charge, because the tax-neutral conversion is then partly reversed after all. This is one of the standard conditions you commit to when approval is granted.
Can I also make a tax-neutral conversion into an existing BV?
Yes, that is possible. A tax-neutral conversion into an existing BV does involve additional points of attention, for example around the relationship between the value contributed and the existing equity of that BV. The treatment differs in parts from a conversion into a newly incorporated BV. We discuss your specific situation in the introductory meeting.
What does guidance through a tax-neutral conversion cost?
The costs consist of two parts. You arrange the notary fees for incorporating the BV and recording the transfer directly with the notary; that falls outside our services. Our guidance covers the declaration of intent, the description of the assets contributed, the request to the tax authority, the reconciliation with the opening balance sheet and after that the fixed monthly bookkeeping for your BV. What your fixed monthly fee will be, we calculate within one working day after you request a quote. All amounts are excluding VAT.
Do you also take care of incorporating the BV?
No. Incorporating a BV and executing the notarial deed is done by the notary. We take care of everything around and after that: the tax preparation, the declaration of intent, the description of the assets contributed, the request to the tax authority and the full bookkeeping of your BV after incorporation. We also coordinate with the notary so that all documents are available on time.