Construction paid by a BV on a shareholder’s private land may count as a profit distribution. Ownership, use, the BV’s rights and the shareholder’s benefit determine the tax treatment. Box 2, corporate profit, VAT and available cash may all be affected.
Why this matters
An invoice addressed to the BV does not settle whether the cost belongs there. The project file must show what the BV received for its payment. Without a clear business basis, the cost may increase taxable profit and create box 2 exposure for the shareholder. VAT may need correction as well. By then, the construction cash has often already left the bank account.
Example
In the case, a BV paid to build a shed or warehouse on the shareholder’s private plot. The shareholder gave differing accounts of business and private use. The court held that the BV had paid costs for the shareholder. It treated the payment as a profit distribution and substantial-interest income for 2015. A building on private land may still serve the BV. Ownership, access, use, the contract and the records must fit the booking.
XTROVERSO tips
- Check ownership and company rights. Record who owns the land and the building. Put a lease or right of use in writing. State what happens to the building when the BV stops using it.
- Match the booking to the facts. Check whether the payment is an expense, fixed asset, loan, salary, dividend or private withdrawal. A supplier name or ledger code is not enough.
- Separate business and private use. Record what the BV stores or does in the building. Note private access and private use. Then review whether costs and VAT need an allocation.
- Keep one complete project file. Store the contract, invoices, bank payments, permits, drawings, photographs and asset record together. Each document should support the same arrangement.
- Review all taxes together. Ask your accountant or tax adviser to review corporate income tax, VAT and box 2 together. Include a possible correction in cash planning.
Need a review of a BV-funded project on private property? We can help identify the records, tax questions and next steps
The data, sourcing, and analysis behind this article were conducted by Linda Pavan. AI was not used to identify sources, build the factual basis, or produce the analytical judgment contained here. AI was used only as a drafting aid. The final English text was personally reviewed, edited, and approved by Linda Pavan before publication.
References
- Taxence - Bouwkosten privéschuur vormen winstuitdeling aan dga
- Rechtspraak - BV-funded construction on private land
- Wettenbank - Regular benefits and profit distributions in box 2
- Belastingdienst - Box 2 rates for a substantial interest
- Belastingdienst - Business costs and taxable corporate profit
- Belastingdienst - VAT and private use
- Belastingdienst - Business records and retention periods
- Belastingdienst - Dividend tax filing and payment
