Dutch Court rules that part-time work does not justify lowering the customary salary (gebruikelijk loon) for DGAs. Learn how the norm amount applies, what evidence is required, and why proper documentation is essential for BV owners.
Court of The Hague Confirms: Norm Amount Remains Leading
In a key ruling, the District Court of The Hague has clarified an important principle for Dutch entrepreneurs and DGAs: part-time work does not justify lowering the statutory “gebruikelijk loon” (customary salary).
This decision is highly relevant for businesses operating through a BV structure, especially those in real estate, consultancy, and other sectors where DGAs often combine multiple roles or work flexible hours.
Case Overview: Real Estate BV Paid Its DGA a Minimal Salary
The case involved a real estate BV engaged in property trading and the rental of a large number of residential units.
From 2018 to 2022, the company paid its DGA only €10,386 per year, arguing that the director worked just one day per week. Two other employees were also employed by the BV.
The Tax Inspector disagreed and raised the salary to between €73,500 and €85,250, based on 75% of the salary of a comparable housing corporation executive.
Court’s Analysis: Comparable Role, Insufficient Substantiation
The court accepted that the DGA’s function could reasonably be compared to the role of a housing corporation director, a point supporting the inspector’s approach.
However, the Tax Inspector failed to sufficiently substantiate why the DGA’s salary should be adjusted upward to the proposed level.
Lacking adequate evidence, the correction was rejected.
Employer’s Argument Rejected: No Proof of Structural Part-Time Work
The BV argued that the DGA’s salary should be below the statutory norm because the DGA allegedly worked part-time.
The court dismissed this argument as well:
No credible proof of structural part-time work
No time registration or workload documentation
No clear distribution of responsibilities showing reduced involvement
In the absence of solid evidence, the statutory minimum customary salary applies.
Final Outcome: Norm Amount Applies for All Relevant Years
The court set the DGA’s salary at the statutory norm amounts:
2018: €45,000
2019: €45,000
2020: €46,000
2021: €47,000
2022: €48,000
2023: € 51,000
2024: € 56,000
2025: € 56,000
2026: € 58,000
These norm amounts form the minimum baseline unless a company can convincingly justify a lower figure.
Additional Issue: Private Use of Company Cars
The court also confirmed an additional assessment for private use of company vehicles, because the BV failed to prove that wage tax on this private use had been withheld or recovered from the employee.
When providing a company car, the BV remains responsible for demonstrating correct payroll taxation.
Why This Ruling Matters for Dutch DGAs and BV Owners
This judgment emphasizes several essential compliance points:
1. Part-Time Work Must Be Proven
Without objective evidence, part-time claims do not reduce the customary salary.
2. The Norm Amount Is the Safe Legal Benchmark
Deviating downward is only possible with strong, well-documented justification.
3. Salary Comparisons Must Be Thorough
Even if a benchmark is reasonable, the Tax Inspector must substantiate it.
4. Company Car Policies Require Meticulous Documentation
Private use remains a high-risk area during payroll audits.
If you want support reviewing your DGA salary, documenting part-time involvement, or assessing wage tax risks, our team can guide you through the compliance steps.
