2022 is almost over. As tax specialists, we prefer to look ahead: what lies in store for us in 2023? But above all: what can or must we do about it? In this article, we highlight two key points.<\/p>\n\n\n\n
The reference date falls on the last day of 2023. If the total amount of the director-major shareholder\u2019s debts to their \u201cown\u201d private limited company (\u2018s\u2019) exceeds the threshold of (\u20ac700,000 + the tax-deductible debt on the director\u2019s own home), the DGA must pay income tax in 2023 (26.9%). For debts owed by related parties (e.g. children), the aforementioned threshold applies separately from that for the DGA, but the DGA pays the tax (not the children).<\/p>\n\n\n\n
The good news is that we still have the whole of 2023 to assess whether it is worth avoiding this levy and which measure(s) would be most beneficial in doing so. In our factsheet Excessive borrowing from own company law<\/a> You can read about how the scheme works.<\/p>\n\n\n\n Unfortunately, the \u20ac700,000 threshold is not a safe haven. For debts up to \u20ac700,000, the Tax and Customs Administration can still argue that it is not realistic for them to be repaid by the director and major shareholder, meaning that this constitutes a disguised dividend payment. Naturally, this argument usually leads to an extensive discussion, which the tax authorities do not automatically win. Where the private limited company\u2019s assets include a pension or annuity obligation, or a retirement obligation, the discussion can become somewhat more complicated.<\/p>\n\n\n\nBusiness succession<\/h2>\n\n\n\n