Management fee between holding and operating BV: VAT, salary and arm's length
Written by Ilias Aarrass6 min read · Published on · Last reviewed on 
In short
With a management fee your holding makes you available as director to your operating BV. The fee usually carries 21 per cent VAT, unless both BVs form a VAT group, and your customary salary as director-shareholder is at least € 58,000 in 2026.
- A holding that supplies management services for payment is usually a VAT entrepreneur.
- Within a VAT group, internal invoices carry no VAT.
- The customary salary in 2026 is at least € 58,000.
- Record the fee in a management agreement at an arm's length amount.
In a holding structure you are often not employed by the operating BV, but by your holding. The holding makes you available to the operating BV as director and sends an invoice for it: the management fee. The money for your salary thus ends up in the holding, which pays your salary from it. That works fine, provided three things are right: the fee is at arm's length, your customary salary is correctly on the payslip and VAT is properly handled. This article shows how those three elements connect, with a worked example and a checklist for the management agreement.
How the money flows
The operating BV pays the holding a fixed monthly amount for the management services. For the operating BV it is a business expense that reduces profit. The holding records the fee as turnover and pays your salary, payroll taxes and its own costs from it. What remains is profit of the holding, subject to corporate income tax.
One advantage is that you have a single payroll, even if you have several operating BVs. Why you would want a holding in the first place is covered in holding structure: why and when.
The customary salary rule still applies
The management fee does not replace your salary. As a director-major shareholder you must receive a customary salary: in 2026 at least € 58,000, or more if the salary in the most comparable job or the salary of the highest-paid employee is higher. The tax authorities look at the work you do for the whole group, not just for the holding.
Worked example: fee of € 7,000 per month
- Annual management fee (excluding VAT)
- € 84,000
- Director's customary salary in the holding
- € 60,000
- Employer costs, car, phone and other holding costs
- € 18,000
- Holding profit before corporate tax
- € 6,000
Result: The fee covers salary and costs with a small margin. A fee well below your customary salary creates a loss in the holding and raises questions about whether it is at arm's length.
VAT on the management fee
A holding that only holds shares is not a VAT entrepreneur. If the holding supplies management services for payment, it usually is. The fee is then subject to 21 per cent VAT. The operating BV deducts that VAT again, provided it has taxable turnover itself. The holding in turn can deduct VAT on its own costs.
If the holding and operating BV together form a VAT group, there is no VAT on the internal fee and you file one return. The flip side is joint and several liability for each other's VAT debts.
| Situation | VAT on the fee | Effect |
|---|---|---|
| No VAT group, operating BV has taxable turnover | 21% | Operating BV deducts the VAT; neutral overall |
| No VAT group, operating BV has exempt turnover (for example healthcare) | 21% | VAT (partly) remains a cost |
| VAT group | None | One return, but joint and several liability |
Arm's length and the management agreement
The fee must match what an independent party would pay for the same services. The tax authorities can correct a fee that is too high or too low, especially if there are other shareholders in the operating BV or if private costs run through the fee; see disguised profit distribution. So record:
- Which services the holding provides and who performs them
- The amount of the fee, the payment term and how often it is invoiced
- How costs such as car and phone are recharged
- Notice period and what happens in case of illness
Frequently asked questions
Does VAT apply to the management fee?
Usually yes, 21 per cent, unless the holding and operating BV form a VAT group. Then internal invoices carry no VAT.
May the fee be lower than my customary salary?
It can, but the holding then makes a loss on your salary. The tax authorities check whether the fee is at arm's length; a fee far below your salary costs is hard to justify.
What is the customary salary in 2026?
At least € 58,000, or more if a comparable job or your highest-paid employee earns more.
Sources
- VAT groupBelastingdienst · belastingdienst.nl
- Salary and substantial interestBelastingdienst · belastingdienst.nl
Sources checked on
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.
Social insurance and practical points
If as a director-major shareholder you cannot be dismissed against your will, for example because you hold at least half of the votes through your holding, you are not compulsorily insured for employee insurance schemes; read director's insurance obligation for unemployment and sickness. Invoice the fee monthly, on a fixed date and with a clear description. That way the entries in both BVs match and you have a consistent story in case of an audit.