The tipping point from sole proprietorship to BV in 2025 – The Happy Financial

When is a BV financially more beneficial than a sole proprietorship? This is the tipping point based on 2025 rates.

Entrepreneurs who see their business growing wonder: when is it worth converting my sole proprietorship into a private limited company? It is often said: “around a profit of € 100,000”. But that is a bit too simplistic. The tipping point depends on your personal situation, the deductibles and the additional costs of a BV. In this article you can read what the tipping point will look like in 2025, with a concrete calculation example.

What do we mean by the tipping point?

The tipping point is the moment when the total tax burden falls into one e.g becomes lower than with one sole proprietorship.

With a sole proprietorship, you pay income tax on the profit (box 1), plus deductions. This is approximately 37% in income tax.

Do you have a BV? Then you pay corporate tax. And at 19.0% (up to a profit of € 200,000), it is a lot lower than the income tax for a sole proprietorship.

However, there are a few things to take into account. As an entrepreneur with a BV you are: director, major shareholder (DGA) employed by your own BV. You then pay yourself a usual salary. In 2025 this will be at least €56,000. You pay payroll tax on this salary (income tax in box 1).

As an entrepreneur with a BV, do you want to pay yourself more money than this DGA salary? Then this is a dividend payment. You pay dividend tax on this from the BV and in private box 2 (substantial interest) in income tax.

Finally, with a BV you have to deal with additional costs. This includes one-off formation costs for a BV (between €500 and €1,500). And the annual administration costs for preparing the annual accounts and the corporate tax return (€ 1,000 to € 3,000 extra annually).

Calculating the tipping point therefore depends on:

• your profit from business
• the right to deduct items (self-employed deduction, starter deduction, SME profit exemption)
• your DGA salary
• additional dividend payments
• extra administration costs for a BV

Tax types for a sole proprietorship and a private limited company

Calculation example: profit € 100,000

To provide insight into the tipping point, we take an entrepreneur with € 100,000 profit in 2025.

1. Sole proprietorship

2. e.g

€28,257

36%

28%The total tax burden in the BV is lower, but the private income from the sole proprietorship is still higher. The BV becomes financially interesting as soon as your profit increases and you can leave part of the profit in the company.Would you like to be able to calculate this for your own figures? Then download the template here ‘

sole proprietorship or e.g

‘ When will the tipping point shift? The tipping point in 2025 is therefore slightly higher than the often mentioned € 100,000. This is locatedon average between

€120,000 and €130,000 profit per year

• . Above that, the BV starts to offer tax benefits, especially if you do not immediately need all the profits privately. That’s because: by
• deductions in the sole proprietorship leveling off with higher profits; by
• corporate tax remains relatively low; and you via the BV

can build capital

without it being directly privately taxed.

• Tax is not the only consideration The switch to a BV is not just about numbers. Other factors often play an equally important role:
• Private liability: In a BV you run less risk in the event of debts or claims for damages.
• Future sales: Selling shares is easier and often more tax-efficient than transferring your sole proprietorship.
• Financing and investors: a BV structure enables the entry of new shareholders.

Professional appearance: Clients often see a BV as more stable and reliable.

You can read more about this in the previous article:

1. Reasons and pitfalls when switching from a sole proprietorship to a private limited company
   Pitfalls in the calculation
2. Only look at profit.
   The tipping point says nothing about your private goals or risks.
3. Forgetting DGA obligations.
   You must pay payroll taxes and prepare annual accounts.
4. Underestimating costs.
   A BV has higher administration costs, often € 1,500 to € 3,000 extra per year.

Paying out too much profit.

• As soon as you pay out a lot of dividends, the tax benefit disappears. The advantage lies in the profit that remains in the BV. Checklist: has the tipping point been reached?You make
• structurally more than € 120,000 profit per year . You want
• build or reserve capital in the company. You can make yourself one
• DGA salary of at least €56,000.You have
• no longer a need for entrepreneurs’ deductions

.

You expect growth, investors or sales of your company. ConclusionThe tipping point from a sole proprietorship to a BV is in 2025 around a profit of
€120,000 to €130,000 per year
.

Below this, the sole proprietorship usually remains cheaper, especially due to the self-employed person’s deduction and lower administrative burdens.

Do you earn more structurally, do you want to leave profits or build up capital? Then the BV becomes more and more interesting. Not only fiscally, but also strategically. A good calculation is tailor-made. Therefore, have a tax specialist calculate your situation, including future plans.Also read: