Dividend tax payout tips

Dividend payout: 6 practical tips

• Assess first whether a payout is prudent - Perform the balance sheet test and the distribution test. After the payout, can you continue to pay your due liabilities, and do equity and reserves remain adequate? Also check bank covenants, outstanding tax liabilities and current-account positions. If you distribute unlawfully, directors’ liability may apply and the dividend may have to be repaid (in part).

• Leverage the lower bracket in Box 2 - For substantial interest income a two-bracket system applies. Indicatively: up to around €68,843 per person 24.5%, above that 31% (amounts are indexed annually). With tax partners you can double the lower bracket. Where possible, spread distributions over years and partners, align your dividend resolution accordingly and avoid falling into the higher bracket unnecessarily. Unsure between dividend and salary? Schedule an Advisory session on tax planning: dividend or salary?.

• Choose the right route: operating BV, holding company or personal - Paying out to your holding is often beneficial due to the withholding exemption and the participation exemption, allowing you to defer Box 2 tax privately until you distribute from the holding to yourself personally. Paying out directly to you personally is liquidity-friendly for you, but triggers Box 2 tax sooner. Sometimes you can offset a receivable or debt with dividend without cash movements, provided it is properly documented. More about setting up and optimising your structure: Services for local entrepreneurs (BV/holding structure).

• Record decisions formally - Prepare a shareholders’ resolution, minutes and a board resolution. Document the balance sheet test and distribution test, including substantiation and forecasts. Record any conditions from financiers and keep everything in your administration. This is crucial in a later review or audit. Need specialist support with rate planning and documenting via a dividend note? Tax advisor for dividend distribution (Eindhoven).

• Handle the dividend withholding tax correctly and on time - As a standard you withhold 15% dividend tax and file and remit within 1 month after the date of making the dividend available. You settle the remainder of the Box 2 tax in your income tax return, crediting the 15% withheld. Pay attention to the date of making available, as it determines the filing deadline. Ensure your substantial interest (AB) dividend is processed correctly in the income tax return: Income tax return: substantial interest (Box 2).

• Avoid problems with excessive borrowing - If you have more than €700,000 in debts to your own BVs per tax partner, the excess is taxed in Box 2. Own-home debts secured by a mortgage right are generally excluded. Consider repaying in time or paying out dividend to stay below the threshold. Have the net effect calculated in advance.

Frequently asked questions

How much dividend on €100,000?

Roughly consider two scenarios for a payout to you personally:

• If you fall entirely in the lower Box 2 bracket: total tax about 24.5% is €24,500. The BV withholds 15% (€15,000) and you pay another €9,500 later. Net about €75,500.

• If you fall in the higher bracket: total tax about 31% is €31,000. After 15% withholding you pay another €16,000. Net about €69,000.

Amounts and bracket thresholds are indexed annually. Always have your situation calculated precisely. Prevent tax interest or additional assessments by updating your provisional assessment after a dividend payout: Provisional assessment 2026 for entrepreneurs.

How do you avoid tax on dividends?

You can’t avoid it entirely, but you can optimise. Use the lower bracket in Box 2 by spreading over years and tax partners, first pay out to your holding to defer Box 2 tax, and take your total income into account. Sometimes set-off with a receivable or debt to your BV is possible, provided it is properly documented.

How much dividend can you pay out at most?

There is no fixed legal maximum in euros. The balance sheet test and distribution test determine the room: after the payout your BV must be able to continue to meet all obligations and reserves must remain adequate. Also take into account statutory restrictions and arrangements with financiers or the Tax Administration.

Is paying out dividends advantageous?

That depends on your goals, liquidity position and total tax burden. Paying out to the holding offers flexibility and often defers Box 2 tax. Paying out to you personally provides immediate cash, but can push you into the higher Box 2 bracket. A combination with salary can sometimes be more efficient.

Need help with paying out dividends?

Profinancials helps you with the dividend resolution, the balance sheet and distribution tests, optimal use of the Box 2 lower bracket and the dividend tax return. We consider your complete tax planning so you keep more net. Contact us for personal advice.