Getting money out of your business? Here's how to do it in a tax-friendly way
November 2024 - As an entrepreneur, you naturally want to get the most out of your business without paying unnecessary taxes. Fortunately, there are several ways to get money out of your business in a tax-friendly way. Below are five tips to do this smartly and legally.
1. Pay a dividend
One of the most common ways to get money out of your company is through a dividend payment. However, this can be disadvantageous if you do not meet certain conditions, such as the minimum holding period or required reserves. Make sure you consult your accountant first to see if paying dividends is tax advantageous in your situation.
2. Opt for a salary instead of a dividend
Sometimes it can be more interesting to pay yourself a salary instead of a dividend, especially if you haven't taken a salary for a while. The advantage is that you build up social rights and also become entitled to certain deductions and benefits. For example, think about pension savings or other forms of social security that you can only take advantage of if you receive a salary.
3. Use a company car in the right way
If your company owns a company car, you can use it for tax purposes. A company car can be an attractive benefit that can be used for both your private and business travel. Make sure you take into account the additional taxable benefit and the right division between professional and private use.
4. Individual pension savings for the self-employed (IPT)
An Individual Pension Provision (IPT) can be an excellent way to build up your pension while saving for tax purposes. With an IPT, your company deposits money into a retirement savings account, allowing you to enjoy a supplementary pension later. This amount is tax deductible, meaning your company pays less taxes. Just make sure you follow the legal rules and plan carefully in consultation with your accountant.
5. Invest in real estate through your company
Real estate is a valuable investment you can make through your company. This way, you can diversify your income and later take money out of your business through rental income in a tax-friendly manner. Moreover, real estate offers the possibility of depreciation, which can reduce your tax burden. Do get proper advice from a real estate expert and your accountant to ensure this investment fits within your tax plan.
