Guidance published on 6 October 2026 separates a BV’s own-share award from wage tax paid for an employee. The share award may face a corporate-tax deduction restriction. Employer-paid wage tax can count as employee remuneration. A non-cash award can therefore create an immediate payroll cash cost.
Why this matters
Private BV shares can hold value but be hard to sell. An employee may owe wage tax without cash to pay it. When the BV pays that tax, payroll must gross up the benefit. That raises the cash cost. A possible corporate-tax deduction does not fund the wage-tax return. The award terms, valuation, board decision and payroll records must match.
Example
The published example uses shares worth €1,000. It assumes a 49.5% wage-tax rate and a grossed-up table rate of 98%. Under those assumptions, the BV pays €980.10 in wage tax for the employee. This illustrates the calculation; it is not the result for every award. The shares are worth €1,000, while payroll needs almost the same amount in cash. The deduction restriction may apply to the shares. Employer-paid wage tax is treated separately.
XTROVERSO tips
- Calculate the payroll cash before approval. Put the share value, wage tax, gross-up and payment date in the cash forecast. Compare the total with payroll, supplier invoices and other short-term bills.
- Confirm who carries the tax bill. State whether the employee pays the wage tax or the BV pays it. Do not leave this to an informal promise or a later payroll decision.
- Support the share value. Keep a valuation that supports fair market value on the acquisition date. Use that date in the contract, board record and payroll file.
- Keep one complete file. Store the award terms, board approval, valuation, employee communication, gross-up calculation, payroll entries and corporate-tax treatment together.
- Flag special arrangements early. Get specific advice on options, discounts, conditional awards, cross-border staff, lucrative interests, leaver clauses or possible WKR treatment.
Planning an employee share award? We can review the cash, payroll, tax and records before board approval
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
- KG:011:2026:7 Artikel 10, eerste lid, onderdeel j, Wet Vpb 1969 en loonbelasting | Kennisgroepen Belastingdienst
- Kennisgroepen Belastingdienst - Tax character and book value of shares acquired as a lucrative interest
- Belastingdienst - Payroll administration and annual wage-tax guidance
- Belastingdienst - Final levy wage and the WKR boundary
- Kennisgroepen Belastingdienst - Institutional force of Kennisgroep positions
