Prolonged deferment of taxation in box 2 by lending from the own company will be restricted
On the 17th day of June the bill excessive lending from your own private company (hereinafter: Bill) was submitted. The name reveals a lot about the content of the Bill. The purpose of the Bill is to discourage excessive lending relationships between companies and their substantial interest holder. A substantial interest is deemed to exist if a natural person has a direct or indirect interest of 5% or more in a company.
In practice, it often happens that the company does not distribute the available cash as salary or dividend to the director-major shareholder, but makes it available as a loan. This prevents taxation at that time and makes it even possible for taxation to be deferred. Reason enough to propose measures that can counteract the prolonged postponement (or even permanent deferral) of taxation.
In short, the bill means that in box 2 income tax will be levied on the substantial interest holder’s debts to his company. This is subject to a limit of € 500,000. If the total of the substantial interest holder’s debts to his own company exceeds € 500,000, the excess will be taxed as a notional regular benefit. The limit for the following year is then increased by the same amount.
The substantial interest holder is not taxed individually, but together with his tax partner for their joint debts in excess of € 500,000. The notional income component is freely attributable between the two partners. In this respect it is not important who has taken on the debt and whether the partner is also a substantial interest holder. In addition, the Bill also applies to debts in the company contracted by relatives by blood or marriage in the direct line of the substantial interest holder.
In principle, all types of civil-law loans are taken into account in determining the amount of debts. The only exception is the owner-occupied home debt, which does not count insofar as a mortgage has been granted to the company in respect of that debt in accordance with the provisions of the Civil Code.
It is proposed to set the effective date at the first day of January 2023. This implies that, for the first time on the 31st day of December 2023, an assessment will be made as to whether there is excessive debt. Until then, substantial interest holders therefore still have the possibility to bring their debt position in their own company below € 500,000.