THE MYTH OF THE €1,000 MANAGEMENT FEE

For years, many small entrepreneurs in the Netherlands have operated through a structure that seemed clever on paper: a holding BV (owned personally) invoices a minimal monthly fee, say €1,000 or less, to the operative BV for “management” or “consulting.” The holding keeps the profits, avoids paying the statutory CEO salary minimum, and issues modest invoices that slip under the radar.

This isn’t just a Dutch invention. Across Europe, this structure has been replicated, tolerated, and, in some cases, encouraged by advisors under the banner of “tax efficiency.”

But on 3 July 2025, that door quietly began to close. The European Court of Justice (ECJ) handed down a judgment in case C-808/23 Högkullen AB, which will profoundly affect how these fee arrangements are treated under EU VAT law and, indirectly, how Dutch entrepreneurs will need to re-evaluate the use of their personal holdings.

Let’s break it down.

THE CORE OF THE RULING: YOU CAN’T NAME YOUR OWN PRICE ANYMORE

The ECJ ruled that:

Articles 72 and 80 of the VAT Directive do not allow tax authorities to automatically treat services from a parent to its subsidiaries as a single lump-sum transaction. Nor can they blindly accept undervalued internal invoices.

In short: you can’t just say, “I charged €1,000 because that’s what I felt the management was worth.” From now on, that number must reflect market value, or at the very least, actual incurred costs, not an arbitrary low fee to minimize tax or avoid salary rules.

And here’s the real kicker: all indirect costs, including “shareholder expenses” like financial structuring, annual reports, audits, and even capital raising must now be included in the value calculation if they support the business operations of the subsidiary.

IMPLICATIONS FOR DUTCH HOLDING STRUCTURES

Let’s be clear: this ruling doesn’t abolish the holding-BV model. But it changes how it must be substantiated.

What will change for micro and small entrepreneurs:

1. No more symbolic invoices: The €500–€1,500 monthly fees from holding to operative BV will be challenged unless backed by cost-calculation and/or a benchmarking study.
2. Minimum director’s salary (gebruikelijk loon) will become enforceable: The Belastingdienst now has a European shield to reinforce Article 12a of the Dutch Wage Tax Act.
3. Intra-group VAT audits will increase: Expect more requests for how the fee was calculated and whether all costs were included. The “cost-plus” method will need proof.
4. Input VAT recovery might be blocked: If the fee is undervalued, the Tax Office can deny your deduction of VAT on shared costs like IT, legal advice, or marketing.

WHAT SHOULD YOU DO RIGHT NOW?

Here’s my advice for every Dutch entrepreneur using a holding:

Reassess all intercompany service contracts

Have you defined the scope of services provided by the holding to the operating company? If it just says “management,” that’s no longer enough.

Implement a cost-based pricing model

Break down the time, resources, and expenses your holding spends for the operative BV. Add a reasonable margin. Document everything.

Review your salary versus service invoice strategy

If your operative BV generates consistent revenue and you’re working full-time for it, the Tax Office will expect a salary, not a symbolic invoice. Mixing the two won't shield you anymore.

Prepare for data-driven tax reviews

Expect audits to request benchmark comparisons, internal allocation logic, and justifications for cost exclusions. This is no longer about tax cleverness—it’s about administrative traceability.

DON’T TREAT THIS AS A FORMALITY

This isn’t a game of paperwork anymore. The ECJ judgment transforms intercompany invoicing into a compliance battlefield where every entrepreneur must defend the economic substance behind each transaction.

And remember: once your VAT deductions are challenged, the domino effect can spread to corporate income tax, salary tax, and even penalties for underreporting.

BUILD STRUCTURES YOU’RE WILLING TO DEFEND

At Xtroverso, we don’t punish entrepreneurs for being creative, but we do insist on integrity over shortcuts.

If your structure is built for risk mitigation, strategic autonomy, or capital protection, we support you. But if it’s a house of cards designed to avoid social contributions or exploit accounting grey zones, this ECJ ruling is your warning bell.

It’s time to update your contracts, re-price your service flows, and prepare to show your work.

Not out of fear, but out of respect for the system you depend on.

And if you’re not sure where your structure stands? We’re here to help.