Every director and major shareholder should answer that question before the end of the year.
€ 500.000
This is because 31 December 2025 marks another reference date for the rules on excessive borrowing. To the extent that the total debts owed to the private limited company are excessive, a notional regular benefit will be included in the income from a substantial interest in 2025. The income tax due on this notional benefit amounts to 31%, except to the extent that €67,804 (€135,608 for tax partners) of substantial interest benefit has not already been received (for example, because a dividend was paid out in 2025). After all, the first €67,804 of substantial interest benefit is taxed at a rate of 24,5%.
The total debt is excessive to the extent that it exceeds the threshold. The threshold is €500,000, plus the tax-deductible mortgage debt on the owner’s own home and any notional regular benefits settled in the past.
Would you like to find out more about the rules on excessive borrowing? Take a look at our factsheet on this subject.