Private costs through your BV: when it becomes a hidden profit distribution

Written by Ilias Aarrass6 min read · Published on 5 October 2026 · Last reviewed on 5 October 2026

In short

If your BV pays for something for you as a shareholder without a business reason, that is a hidden profit distribution: the BV may not deduct it, you pay box 2 as if it were a dividend, 15 per cent dividend tax is due and VAT on private spending is never deductible.

A transaction at a non-market price, such as too much rent for your property, is also a hidden profit distribution.
A private expense of € 4,000 through the BV costs at least € 1,740 in corporate income tax and box 2.
Paid something private by mistake: record it as a receivable in the current account and repay it.
As a director-shareholder you are an employee, so within the free allowance of the work-related costs scheme the BV can reimburse you tax-free.

With a BV the temptation is great: the account is in the company's name, there is money in it, and a holiday or a new sofa is quickly paid. But the BV is not your wallet. What the BV pays for you without a business reason is, in the eyes of the tax authorities, a hidden profit distribution: a dividend that is not called one. That costs you more than if you had simply paid it out properly as a dividend or salary. This article covers what a hidden profit distribution is, what it costs, which situations go wrong most often and how to resolve it.

What is a hidden profit distribution?

There is a hidden profit distribution when the BV gives you as a shareholder a benefit it would not give an outsider, and you and the BV both know it. The point is that the benefit only exists because you are the shareholder.

That can be a payment, such as a private bill settled by the BV, but also a transaction at a price that is not right: you buy the BV's car for too little, or the BV rents your property for too much. In all those cases value flows from the BV to you without being recorded as a dividend or salary.

What does it cost you?

A hidden profit distribution is taxed in three places. The BV may not deduct the expense as a cost, so the profit and with it the corporate income tax goes up. You receive what is, for tax purposes, a dividend and pay box 2 on it. And dividend tax of 15 per cent is due on that dividend, which you can offset against your box 2 tax. If the BV did not withhold that dividend tax, the tax authorities may also gross up the amount, making the levy higher.

Then there is VAT: VAT on private expenses is never deductible. If the BV reclaimed that VAT anyway, a correction follows there too, possibly with a penalty.

Example: a private holiday of € 4,000 through the BV

Corporate income tax: the € 4,000 is not deductible: 19% = € 760 extra
Box 2 for you: 24.5% on € 4,000 = € 980
Dividend tax: 15% = € 600, offset against your box 2
Possibly extra: VAT correction, gross-up and a penalty

Result: You pay at least € 1,740 in tax on a holiday you could also have paid properly from a declared dividend, plus a conversation with the tax authorities.

Situations that often go wrong

In practice it is rarely about deliberate intent. Usually it creeps in because business and private matters get mixed up. These are the situations we see most often:

Situation	Why it is a hidden dividend
Holiday, clothing or furniture for home through the BV	no business reason, purely private
Renovating your own home at the BV's expense	the benefit only goes to you
The BV rents your property for more than market rate	the part above market rent is a distribution
You buy a car or laptop from the BV for too little	the difference from the true value is a distribution
A withdrawal without repayment arrangements	a loan that never has to be repaid is not a loan

Paid something private by mistake? How to resolve it

Everyone sometimes uses the wrong card. That is not a problem, as long as you process it correctly. Do not record the expense as a cost, but as a receivable of the BV from you in the current account, and repay the amount to the business account. Do not deduct the VAT either. That way no benefit has flowed to you and there is no hidden distribution.

If you want to take money out of the BV on a regular basis, choose a route deliberately: paying a dividend, a higher salary, or an allowance within the work-related costs scheme. As a director-shareholder you are an employee of your BV, so within the free allowance the BV can also give you tax-free allowances.

Use the business card only for business expenses.
If it went wrong anyway, record it in the current account and repay it.
Never deduct VAT on expenses that are private.
Record transactions between you and the BV at market prices.
Take money out of the BV deliberately: through salary, dividend or an allowance.

Frequently asked questions

What is a hidden dividend?

A benefit the BV gives you as a shareholder without it being recorded as a dividend, and that an outsider would not receive. For tax purposes it is treated as a dividend.

Can I pay private expenses through the BV and pay them back later?

Yes, if you record it as a receivable from you in the current account and actually repay it. Then it is neither a cost nor a distribution.

Is dividend tax levied on a hidden profit distribution?

Yes, 15 per cent. You can offset it against your box 2 tax, but if the BV withheld nothing, the tax authorities may gross up the amount.

What if I rent my own property to the BV?

That is allowed, at a market rent. If the BV pays more than an outsider would, the difference is a hidden profit distribution.

Sources

When you pay a dividendBelastingdienst · belastingdienst.nl
Dividend Tax Act 1965Overheid.nl · wetten.overheid.nl

Sources checked on 5 October 2026

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.