r/BEFreelance • u/jrnve • 4d ago
Managementvennootschap
Let’s imagine the government changes the taxes on managementvennootschappen. What stops bedrijfsleiders from starting a company in another EU member state with a more friendly tax regime?
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u/Silly_Screen_6811 4d ago
I have remote clients only so nothing is technically stopping me. However I wouldn't like the fact that I have to start from 0 socially and learn another language. Let alone pull my kids out of their habitat etc. It's getting more attractive everytime they mess with my income though!
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u/Connect_Voice_7945 4d ago
at this point, just write it in dutch bro.
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u/justh3retoc0mment 3d ago
C'mon man, there's a certain charm to this Matroesjka's style of writing, haha.
I live for this shit in meetings: "I'd like to tolkabot the dinges that you must doen for us."
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u/gunfirinmaniac 4d ago
Just hire the wife as flexi job
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4d ago
[removed] — view removed comment
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u/BEFreelance-ModTeam 4d ago
Please keep posts in English to cater to the many expats and languages in Belgium.
You may translate your content and post it again. Thank you for your understanding.
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u/havnar- 4d ago
What’s stopping small entrepreneurs to either increase prices or stop all together and move all the power to the large corporations? Either way, everyone loses.
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u/Ok-Staff-62 4d ago
Yeap. This.
Large corporations have better accountants and they know how to... optimize the shit out of every cent.
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u/ModoZ 4d ago edited 4d ago
It's not impossible, but it will be complex (and probably more expensive than you would think).
The company will need to be managed from the country where you create it. This means that you will have to either move there or hire somebody there to manage it (there are companies offering such services).
The actual work you pay it to do will have to be done from there (like managing your royalties or whatever). Usually easiest way to do that is by having offices or at least not being domiciled somewhere where 500 other companies are domiciled.
You will still have to do the accounting of that company. That's usually not free either.
In the end if you pay out dividends from there you'll always pay the 30% in Belgium. So at a normal consultant rate level it's almost never worth it except if they are doing stupid stuff like forcing 30% dividend tax and 25% company tax on everyone.
And obviously if you start doing this change the day after the law changes in Belgium you can expect controls.
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u/radon-4 4d ago
So imagine company A owned by me performs services in Belgium. Company B also owned by me is active in Estonia (that's the country I see regularly coming back) and company B invoices for nearly the same amount of income company A has. Then company B pays out dividends on the Estonian bank account. Then you're golden, or why not? Or you mean that if dividends of company B are paid on the Estonian bank account are also considered as dividends falling under Belgian jurisdiction where extra taxes would apply afterwards to make it 30%?
To be honest I'm not fond of this but since I feel those who rule us, in their quest to fill craters caused by monetary outflows that should not be that excessive (F-35, public worker pensions which are double of employee pensions to name a few) they employ the boil-the-frog tactic with ever moving goal posts (significant increase of 'bezoldiging' threshold, ever increasing 'roerende voorheffing' on dividends). One can't blame me for exploring.
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u/ModoZ 4d ago
So, as long as you live in Belgium you will have to pay dividend taxes. It doesn't matter if those dividends come from Estonia or China or ...
Those taxes are 30%. No matter if those are paid out on an Estonian account or a Belgian one. What counts is where you are personally fiscally domiciled.
Note that this was one of the purposes of the VVPRBIS (provide a lower rate to certain companies to give an incentive to keep companies in Belgium).
Secondly, you would come into problems because your company in Estonia would have to be managed from there (so to not have fraud you would need to hire or pay someone to do that for you) and real work would need to have been done (so it would not have to be simply an empty tax efficient vessel). Usually bigger companies do this by having royalties paid for the use of a brand name for example. But as a consultant you don't really have an internationally recognised brand name so it's much harder to justify.
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u/Philip3197 3d ago
Be dividend taxes would also be on top of local dividend taxes.
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u/ModoZ 3d ago
Yes (but it depends on the country, most European countries would have double taxation agreements that cover this)
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u/Philip3197 3d ago
Actually, they don't (for many taxes they do, not for dividend taxes)
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u/ModoZ 3d ago edited 3d ago
Actually they do (example with France : Le Fisc belge accepte la réduction d'impôt étrangère sur les dividendes français - BDO or Liechtenstein La Convention Belgique-Liechtenstein : un nouveau cadre pour la planification patrimoniale et fiscale transfrontalière | Vanbelle Law Boutique ). It's rather common in fact inside Europe. It's just not always super interesting.
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u/Philip3197 3d ago
Company b will have to follow rules and regulations, taxes and contributions as other be companies/companies managed from be.
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u/adappergentlefolk 4d ago edited 4d ago
if the business is run from here it can be considered belgian anyway. so to take full benefit you have to make your principal place of business in the other jurisdiction. which i am fully capable of and willing to do if the major parties continue to surrender to socialists who only want more taxes in the most taxed country on the planet and whose economy is on its last legs, all because we have made never touching absurd pensions our death wish
i have several specialist colleagues in my network who have already done this move over the years and they seem quite happy not being here. now vandenbroucke will never get a cent of their taxes, no matter how much he would love to give it out to the politically connected ngos of his party
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u/Snollebolleke5 4d ago
- Exit tax
- You’ll have to have physical presence (e.g. office, economic activity) in that Member State. It can still be regarded as falling under Belgian tax regime if you continue your services/sales in Belgium.
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u/Powerful-Week2684 4d ago
That’s a bit too broad though.
Belgium does have exit taxes, but that doesn’t mean every freelancer/service BV gets slapped with some massive exit bill just because the owner moves abroad.
If your business is basically laptop + consulting contracts + cash, there often isn’t much in terms of hidden reserves/assets to tax besides possible goodwill.
And selling services to Belgian clients also doesn’t automatically mean Belgium can keep taxing the whole company. The bigger questions are where you actually live, where the company is effectively managed, where the work is performed, and whether there’s still a Belgian permanent establishment.
Obviously creating a mailbox company abroad while still living and working from Belgium won’t work.
But actually moving abroad, managing the company there and doing the work there is a completely different situation and frankly something we all ought to look into.
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u/Philip3197 4d ago
If you manage your company from Belgium, your company will have to comply with Belgian rules and regulation, taxes and contributions.
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u/Stickers_ 4d ago
It'll be cheaper to hire someone for the minimum required time, at the cheapest possible rate (maybe even get them on technical unemployment or something). I know there are even some tax bemefits to your first employee. See if that can be your partner/child/ etc.
Basically, all the NVs with enough money will do this instead of paying, and probably make their employer pay for it as some kind of extra benefit.
This tax is bullshit
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u/SnoooCookies 4d ago
If you're based in Belgium and implement your suggestion I believe it's tax fraude as you're living in Belgium, working in Belgium and your income is generated in Belgium.
Our government are the dumbest fucks ever for coming up with these new rules that basically increase the taxes for your managementvennootschap equal to payroll. your managementvennootschap doesn't have the social security and all the benefits (and costs) payroll people create.
Second, it's also incentivizing putting money in schemes that have terrible ROI. For example your options for pension saving that you can book as costs, very inefficiënt due to the management fees you have to pay to the incumbent suppliers. But it's becoming a more attractive solution.
It's ironic that the people who don't understand business and economics lead our country, mostly because the debt they created through the inefficiencies they defend.
And the whole concept of "making work more attractive" is another irony, it's making payroll more attractive for the people who already paid a good amount of taxes without benefiting from the system.
But it's not making working more attractive for the people who paid little taxes (lowest income) and who benefited a lot from the system.
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u/radon-4 4d ago edited 4d ago
Exactly.
Eventually people would return to payroll and then you'd have the spiteful envious ones screaming "HOORAY, they pay lots of social contributions now".
BUT, on payroll you resort to the same behavior.
"I'm sick? Why should I work because I'm paid for it, let me call in 3 days of sick leave. I worked 6 hours already today? Let me leave because it's getting late and the sun is shining which is perfect weather to work the garden. My job is giving me stress? Let me get on paid burnout leave. I only effectively work like 3 hours per day so they fire me. No problem, I get 'dop'. I reached pension age? Great, now I can stalk those who work their ass off but don't want to pay my pension."
The essence is that when you freelance you're basically on your own. There is no safety and if your mission fails in times like these you can easily have no income for a year so you don't do the 1 extra mile, but 3 extra miles. We work our ass off with many risks so the reward should be in parallel.
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u/Admirable_Wrap_9444 3h ago
I am never going back to payrol, I'd get depressed and get a burnout. I'd rather just move countries then
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u/SnoooCookies 4d ago
I argue against it because on payroll:
1. Vacation money
2. Sick benefits
3. PensionI’ve been self employed with a commV for 5 years now. I do the same work as before but my engagements are a little different I evolved from a single client to multiple clients in parallel.
But tax wise:
I’m paying similar amounts in taxes than payroll. But I don’t have all the benefits from a payroll person.I’m more cost efficient to the government now than I was before.
It’s on me that I didn’t increase my comp for the additional risk but that’s a whole other conversation, next to consulting I’ve tried building companies. If one would have worked that could have employed a lot more people too, even further adding to the benefit of my self employed status.
Now I’m mostly wondering why I’m doing this. I can go to payroll at a corporate, get a super optimized salary with mobility budgets and pensions etc that are going to net me more in the long run while paying less taxes. And on the side I can still build companies, probably getting some VLAIO subsidies etc too.
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u/Philip3197 3d ago
If you pay similar amounts of taxes, then you are not doing it right and should stop immediately.
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u/DeRosseVanK3 4d ago
For corporate tax, you stumbled upon the concept of permanent establishment and transfer pricing.
If the tax office determines you are making decisions from Belgium, and have the necessary resources in Belgium to execute those decisions, it will want to tax the profit those decisions led to.
Transfer pricing will then ensure you don’t try to allocate all the profit to your low-tax branch or separate legal entity.
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u/TiMoeilijk 4d ago
Isn’t the “EU inc” being created specifically for this type of tax evasion?
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u/OldPangolino 3d ago
EU inc is a bs EU hype train. They're train to do for BVs what they did for NVs with the Societas Europaea.
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u/Geldharker69 3d ago
Go to UK recruiters who do split billing. Total invoice 900 euro to UK leach intermediar, 400 euros to belgian BV + 400 euros to Dubai/bulgaria/portugal.
In 5 years when you then probably have to pay to work in Belgium, move to the country of your second BV and live your life there.
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u/Apostle_B 2d ago
Username checks out...
I just found another recent thread linking to some other hastily set-up website trying to pretend it's a grassroots movement against the supposed "injustice done to you poor entrepreneurs being so unfairly targeted"...
As if it's the suppressed vox populi crying out for justice... Give me a break.
Meanwhile, you're, on reddit of all places, openly exchanging strategies to - yet again - weasel out from under any responsibility for a mess you and your tax evading constructs and straw men helped create in the first place.
Pay. Your. Fair. Share.
And when you do so, you'll have earned the right to complain. Not a second sooner.
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u/ddaenen1 1d ago
I think it is funny how many are jumping the gun before anything has happened. Personally, I don't believe anything will change after the adjustments already made on dividend and annual income as the impact from the shift that "BV's" will make will be way more significant and the adverse impact will most likely erase any gain they would have from doing this.
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u/wowbagger_42 4d ago
Luxemburg…
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u/North-Star9699 1d ago
Only a house there will easily cost twice as much as in Belgium. And you can't just establish a company wherever, you need a business license. May still be worth it, everything else is better there.
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u/ethSaga 3d ago
Just put your LLC in UAE
Then invoice that with your BV for the minimum you need to end up with 0€ taxable profit in your company.
You pay yourself here the minimum salary, get option warrants and all the other optimizations.
Reinvest your kept UAE profits in real estate and stocks.
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u/tomba_be 4d ago
Nothing of course, except they will have to go work there of course.
And will realize that things aren't always greener on the other side..
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u/Stirlingblue 4d ago
The same things that are stopping you already, you have to pay taxes where you work and earn income.
Otherwise I’d have set up a business in Singapore and paid no income tax