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Sole trader or BV: when is switching advantageous?
Written by Ilias4 min read
When you start as an entrepreneur, you usually begin with a sole trader business. As your business grows, the question eventually arises: should I switch to a BV? That's not a simple yes or no. It depends mainly on your profit, but also on liability and your plans. This article explains what to look out for.
What's the difference between a sole trader and a BV?
With a sole trader business, you and your company are the same for tax purposes. You pay income tax on the profit and benefit from deductions such as the self-employed deduction and SME profit exemption. With a BV, your company is a separate legal entity. The BV pays corporate tax on the profit, and you as director-major shareholder receive a salary and possibly dividend.
From what profit does a BV become interesting?
As a rule of thumb, a BV only becomes interesting for tax purposes from a profit of around 80,000 to 100,000 euros per year. Below that level the sole trader's deductions are often more advantageous. Moreover, as a DGA you must pay yourself a customary salary of at least 58,000 euros, which at lower profits leaves little room for the favourable corporate tax rate.
What role does liability play?
Besides tax, liability plays a role. With a sole trader business you're liable with your private assets for your company's debts. With a BV that's in principle separated: the BV is liable, not you personally. If you run larger risks in your work, a BV can be attractive for that reason, even at a lower profit.
What's involved in switching?
Setting up a BV goes via the notary and involves incorporation and annual costs, such as a mandatory annual report. You can transfer your sole trader business into the BV silently or with settlement; which route is most favourable for tax differs per situation. So always calculate the switch carefully in advance.
How do you make the right choice?
The choice between sole trader and BV is not a snapshot, but something to review periodically as your business grows. A good bookkeeper calculates both scenarios for you based on your current figures and plans, so you don't switch too early or too late.
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
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