Sole proprietorship or BV: the break-even point is falling, but more slowly than you think

Anyone searching for when a BV pays off finds profit figures from EUR 66,000 to EUR 200,000. That is not sloppiness on the part of the sources: the break-even point does not exist as a single number. It depends on three assumptions that most worked examples do not mention. This article lays those assumptions bare, shows how the break-even point shifted from 2021 to 2026 and what the cabinet's plans up to 2030 do to it. At the bottom is the calculator that works it out for your own profit.

Why there is no fixed break-even point

A sole proprietorship (eenmanszaak) pays income tax on its profit, after the self-employed deduction and the SME profit exemption. A BV first pays a salary to its director-shareholder (the customary salary, at least EUR 58,000 in 2026), payroll tax on that, then corporate income tax on what remains (19% up to EUR 200,000) and finally box 2 tax on the dividend (24.5% up to EUR 68,843, 31% above that). Three choices decide the outcome: how high the director's salary is, whether the profit after tax is paid out as dividend straight away or kept in the BV, and whether the extra costs of a BV are counted. Counting retained profit without the latent box 2 claim gives EUR 70,000 to 90,000; paying everything out and counting the costs gives around EUR 100,000. Both are 'correct' under their assumptions. That is why the calculator shows the assumptions instead of hiding them.

What the comparison includes

The default assumptions in this article and in the calculator: the whole profit is paid out as dividend in the same year, the director's salary is at that year's statutory minimum, the BV costs EUR 3,000 a year extra (annual accounts, corporate tax return, payroll), the hours criterion is met and there is no starter's deduction. On the sole proprietorship side the calculator uses the same engine as the income tax calculator: brackets, general tax credit, employment tax credit, the rate adjustment on deductions and the healthcare contribution. On the BV side the director pays payroll tax and the low healthcare contribution on the salary, the BV pays corporate tax, and the shareholder pays box 2 on the dividend. Fiscal partner, state pension age, company car and pension are left out.

From EUR 124,800 to EUR 99,100 in five years

In 2021 the break-even point under the default assumptions was EUR 124,800. The self-employed deduction was EUR 6,670, the SME profit exemption 14% and box 2 had a single rate of 26.9%. In 2022 it fell to EUR 112,000, mainly because the deductions were only deductible at 40% instead of 43%. Then 2023: the break-even point rises to EUR 118,400. That is not an error. Corporate tax went from 15% to 19% and the customary salary from EUR 48,000 to EUR 51,000, while the self-employed deduction was still EUR 5,030. The BV became more expensive that year; the sole proprietorship did not become cheaper. From 2024 it moves fast: the self-employed deduction drops to EUR 3,750, 2,470 and 1,200, the SME profit exemption to 13.31% and 12.7%, and box 2 gets a low bracket of 24.5%. The break-even point comes out at EUR 106,000 in 2024, EUR 100,000 in 2025 and EUR 99,100 in 2026. Over the whole period that is a fall of more than EUR 25,000.

What that means for someone with EUR 120,000 profit: in 2021 the sole proprietorship was still EUR 268 better off at that profit, in 2026 the BV keeps EUR 2,596 a year more. Around the break-even point it is a matter of hundreds of euros, not thousands. At EUR 100,000 profit the 2026 difference is exactly EUR 117 in favour of the BV; at EUR 150,000 it is almost EUR 5,000. Setting up a BV for a few hundred euros a year is not sensible; the advantage only becomes structural at profits of EUR 130,000 and above, and even then liability, pension and partnerships often weigh more than the tax.

The three levers that decide the answer

The director's salary is the biggest. Someone who has to pay themselves EUR 75,000 under the customary salary rules, because a comparable employee earns that, sees the 2026 break-even point move from EUR 99,100 to EUR 121,700. The extra costs of the BV are the second: without that EUR 3,000 the purely fiscal break-even point is EUR 87,500, which is the figure many calculators show. The dividend policy is the third, but it only works higher up the ladder. Keeping profit in the BV and paying it out in instalments so that the dividend always falls in the low box 2 bracket gains EUR 8,145 over the sole proprietorship at EUR 200,000 profit instead of EUR 5,302. At the break-even point itself it makes no difference, because the dividend stays below the EUR 68,843 threshold anyway.

What the plans for 2027 to 2030 do

The decline is largely over. The only change already in law is the last step of the self-employed deduction: from EUR 1,200 to EUR 900 in 2027. That step moves the break-even point by about EUR 800. The cabinet's coalition agreement, the 2026 Spring Memorandum and the announced contents of the 2027 Tax Plan say nothing about the self-employed deduction or the SME profit exemption. Announced but not yet law: the starter's deduction is reduced in 2027 and abolished from 2028, and the mandatory disability insurance for the self-employed (premium 5.4% of profit, not for directors) starts in 2030 at the earliest. Advisory bodies have argued for years to phase the self-employed deduction out entirely; there is no cabinet decision on that. And the reverse is possible too: a higher box 2 or corporate tax rate makes the BV more expensive and pushes the break-even point up. The table below sets those scenarios side by side, in 2026 prices.

Update 19 September 2026: the 2027 Tax Plan was submitted on Budget Day. It confirms the self-employed deduction of EUR 900, cuts the starter's deduction to EUR 10 in 2027 and abolishes it in 2028, and leaves the SME profit exemption, corporate income tax and the box 2 rates untouched. The first- and second-bracket rates in box 1 do rise, to 36.23% and 38.16%; that affects both sole-proprietorship profit and the DGA salary. These are proposals on which both houses of parliament still have to vote. That is why 2027 remains a forecast in the calculator, recognisable by the dashed line, until the plans have been adopted and the Dutch Tax Authority has published its tables.

Work out your own situation

Enter your expected profit, pick the tax year and adjust the director's salary, the BV costs and the dividend policy under 'Adjust assumptions'. The calculator gives the answer in one sentence, shows the break-even point under your assumptions and, in three tabs, how the net income per legal form develops, where the break-even point was in each year and how the calculation is built up.

More than tax

A BV is a separate legal entity: the BV's debts are in principle not your debts, which can be the decisive argument with larger contracts or staff. Against that, a BV brings obligations (annual accounts, filing, payroll, customary salary) and the profit is only yours once it has been paid out as salary or dividend. Anyone not yet past the break-even point on the tax side is usually better off waiting, unless liability or a partnership calls for a BV now.

Want to know whether switching pays off in your situation, including the items the calculator leaves out? Dutch Tax House runs the numbers and says honestly when a BV is not (yet) worth it. Feel free to get in touch.