VVPR bis for dividends

Paying dividends is interesting, until the withholding tax around the corner. With VVPR-bis can that pressure drop to 20% and afterwards 15%instead of 30%. Do you really have to wait 3 years then? Not necessarily. With smart timing you can Cash in earlier And yet still benefit from the reduced rate.

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What is VVPR bis again?

The VVPR-bis regime stimulates entrepreneurs and small companies to build capital. Do you, as an original shareholder, monetary contribution upon incorporation or via Share issue, and this capital becomes fully immersed, then under the right conditions you can reduced withholding tax Apply to your dividends.

Rates

• Third financial year following the input: 20%
• From the fourth fiscal year: 15%

Without correctly contributed and fully paid-up capital is there No access to the reduced rate via VVPR-bis.

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How much withholding tax do you normally pay?

In Belgium, you typically pay 30% withholding tax on your dividend.
Use your VVPR-bis, then this can 20% of 15% provided that:

• your company a Small business according to the new company law;
• I am a additional cash contribution at incorporation or upon an increase of capital;
• the fully paid-up capital is used for assigning new (preferred) shares;
• your at least 3 years waiting (until second financial year following the financial year of the contribution).

Why wait… when it can be done faster?

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Faster payouts: 3 practical strategies

Shorten your first financial year

Set up your company and Choose a short first financial year consciously (e.g. incorporation in October and closing on 31/12). As a result, you move through to your second and then Third financial year—the moment when you first 20% can apply, and then 15%.

Kernel timing is essential; with Smart planning You get faster access to the reduced rate.

2) Distribute an interim dividend

You do not need to wait for the general meeting to approve the profit distribution. With a internal balance which demonstrates sufficient distributable profits, you can a interim dividend pay out during the current financial year.

• As long as VVPR-bis terms not yet fully fulfilled, applies 30%.
• Are the terms Hello fulfilled? Then the rate can drop to 20% of 15%, depending on the year of benefit.

3) Loan from your company (with interest)

Do you need cash faster? Consider a Loan from your own company under market-compliant terms (Acceptable interest, clear repayment, legally sound agreement).
This replaces no dividend, but does offer a Temporary cash solution without withholding tax.

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The ultimate combination: at 15% after ± 30 months

Do you want to maximise your returns and pay out faster? Combine:

• Short first financial year upon incorporation;
• Nil paid of the capital;
• Interim dividend from the second year (if the numbers allow);
• Waiting for it second financial year following the input to the Withholding tax reduced to use.

In some cases, you can after about 30 months pay dividends to 15% instead of 30%.

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What do you consider the smartest approach?

That depends on your situationAre you just starting or optimising existing companyDo you work with Preference shares Are you planning a Share issue with new shareholders? Important questions include:

• Does your company comply with the Criteria for a small business?
• Is it capital fully immersed?

The right Mix of timing, input structure and benefit form makes the difference between 30% of 15% Withholding tax.

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Conclusion

VVPR-bis is one powerful instrument to reduce your withholding tax. By bright plans, I capital contribution good to structure and the right Benefit form to choose, you can pay out faster and more affordably.

Do you have to wait 3 years? Not necessarilyAfter reading this article, you're in charge..
Do you have any more questions? Arrange an appointment with our advisors and make sure you make the most of your profits.