Many entrepreneurs think all the money in their business account is already ‘theirs’. In a way, that’s true: you worked for it and you can do whatever you like with it. But the Tax Authority (Belastingdienst) sees it slightly differently, and that is where the tax opportunities for entrepreneurs lie.
Money you leave in your sole proprietorship (eenmanszaak) is part of your business assets, and that does not fall under Box 3. Savings you put in the bank privately can fall under it, but as long as the money stays in your business, it does not count as private assets. That gives you just a bit more room to save for investments, future costs or simply a healthy buffer. Of course, as always, you pay income tax on your profit, but in this case Box 3 doesn’t come into the picture.
It also offers another advantage: you can make a pension contribution from that same business account. Many entrepreneurs think this can only be done privately, but the opposite is true. You can easily top up your pension from your business assets. This is attractive because a pension contribution within your annual allowance (jaarruimte) is deductible in Box 1. Your taxable profit goes down, and as a result you pay less income tax. So you don’t first move the money to your private account, which means it doesn’t end up in Box 3 there either.
The strategy is simple: leave the money in your business as long as you don’t need it privately, and use your business account to strengthen your pension.
Do make sure you contribute within your annual allowance or carry-forward allowance (reserveringsruimte). That is the only condition for being allowed to apply the deduction. Can’t figure it out? Then of course we’re happy to think it through with you.
In short: leaving money in your sole proprietorship avoids Box 3 tax and makes pension contributions more tax-efficient. A smart combination that lowers your tax burden and helps build a stronger financial foundation for later.