Sole proprietorship administration office

Sole proprietorship. Among the self-employed, the sole proprietorship is the most common form of entrepreneurship. The sole proprietorship is easy to set up (Chamber of Commerce) and has many tax advantages, especially for the self-employed person as a starter.

If you are unsure whether you are an entrepreneur, check this checklist

The self-employed person is entitled to:

SME profit exemption

And if the self-employed person works more than 1225 hours per year on his business, the self-employed person is also entitled to:

Self-employed person’s deduction
Start-up deduction

The self-employed person is jointly and severally liable with his entire assets, including his private assets (own home, boat, second car, etc.) for all debts of his company. With the administration of the sole proprietorship, you are subject to income tax.

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Credentials

What does sole proprietorship administration office need to complete your income tax return

WOZ value of your own home.
Bank statement mortgage with interest paid and the final debt as at 1 January and as at 31 December.
Other Loan Statements.
Total of your savings (shares, securities too) as at 1 January and as at 31 December
Entirely of a family loan and the interest paid.
Overview insurance, endowment insurance.
Pension agreement.

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Credentials

Keeping records for 7 years

According to the Dutch Civil Code and the tax authorities, you must keep self-employed records/accounts. It is the General Law on State Taxes that stipulates that you must keep the books and documents that are important for the levying of turnover tax and income tax.

By law, you are required to keep these records for seven years. If you invest in real estate and there is VAT on it and you reclaim it through input tax, you must keep these invoices, etc., for ten years.

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From sole proprietorship to B.V.

You have a sole proprietorship and are thinking about switching to the b.v. form. That’s not always wise. There are two motives for doing this, tax advantage, if your net profit is higher than 150,000 euros then you can talk to your accountant. Or you do this to avert strict liability.

Rushing conversion of sole proprietorship to B.V. (with tax settlement)

This is the case if your property is transferred to the B.V. at its actual value. The sole proprietorship is discontinued. You must settle for tax purposes on the released silent and fiscal reserves, goodwill and any accrued fiscal retirement reserve. Also note that if you have had an investment contract, you must now divest yourself.

If the discontinuation profit is more than the amount of the cessation deduction and discontinuation annuity, that profit is at the normal income tax rate.

In the case of the B.V., you contribute the assets and liabilities of the sole proprietorship.

Silent conversion of sole proprietorship to B.V. (without tax settlement)

This is often most advantageous if you have a high staking profit. In that case, the income tax to be paid on the cessation profit can be fully deferred.

This is the case if the entire company is transferred to the B.V. at book value. You will have to deal with a tax and commercial side to the story here.

Here, it is assumed for tax purposes that the company has not ceased.

Therefore, you do not have to settle on the hidden and fiscal reserves, goodwill and you do not have to divest from it.

You do have to pay for your tax retirement reserve. You can often counteract the income tax to be paid on the release of the fiscal old-age reserve by applying the cessation deduction and the cessation annuity.

The other point is the commercial part. From a commercial point of view, the transfer does take place at actual value. Almost the total value of the company is converted into share capital.

We work with an accountant who can guide you through this process.