Cabinet to relax rules for owner directors

The cabinet is to relax the tax rules for companies with owner directors by removing compulsory salary requirement of at least €40,000, the Financieele Dagblad reports on Tuesday quoting sources in The Hague.

Instead, ministers are to discuss making owner director pay reflect the company’s profits. This will help limited companies (bvs) which are struggling financially to keep out of debt, the paper says.
The Dutch small business association MKB Nederland and the tax advisor’s lobby group NOAB wrote to junior finance minister Jan Kees de Jager recently urging him to make the changes, the paper says. They argue companies are being forced to set aside large parts of their shrinking profits to pay their owner director, which means there is less money for investment.
It is ‘unfair and ridiculous’ that firms are being forced to pay cash to an owner director even if they are making a loss, the organisations said.
The paper says De Jager is prepared to make concessions and these will be announced around budget day on September 15.
However, the minister will not scrap the compulsory wage requirement altogether to make sure owner directors do not avoid paying social security and health service premiums, the paper says.

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