The approval of the latest program law of the De Wever government changes a number of tax game rules around dividend payments for SMEs. Not only for future reserves, but in some cases also for already accumulated reserves.
One of the new options is to distribute existing liquidation reserves early at a higher withholding tax rate. An interesting option or not? In this article we take a closer look at it.
What will change?
In a nutshell, this tax reform amounts to a equalization of the tax burden and waiting period for liquidation reserves with those of VVPRbis.
Liquidation reserves established as of Jan. 1, 2026, will be already after 3 years (instead of 5 years) can be paid out, but at 6.5% withholding tax (instead of 5%).
As a result of this change increases the total tax burden For the liquidation reserve of 13.64% to 15%, which is in line with the valuation at VVPRbis. On liquidation, however, the withholding tax on liquidation reserves remains 0%.
What about existing reserves?
VVPRbis
For reserves under the system of VVPRbis there is only a change for insert from January 1, 2026. Profit distributions from these contributions will be made during the second fiscal year after the contribution to 30% withholding tax be subject. From the third fiscal year after contribution, however, the 15% rate is retained.
Liquidation reserves
For the existing liquidation reserves (laid out until December 31, 2025) you can choose between the old and the new system.
- Do you choose the old system? Then these reserves can after 5 years be paid out with deduction of 5% withholding tax.
- Do you choose the new system? Then the benefit may already after 3 years happen, albeit withholding 6.5% withholding tax.
Caution: you cannot freely choose which liquidation reserve is distributed. When paid out, they are always first the oldest reserves that are paid out! So be careful not to unnecessarily deduct 6.5% withholding tax instead of 5%.
Is early distribution of liquidation reserves a good idea?
In some situations yes, in others no. We discuss them briefly below:
I need extra private money
In this case, it is usually advantageous to spontaneously pay a little more withholding tax to obtain private funds more quickly. This 1.5% additional withholding tax is often cheaper than borrowing money privately Or otherwise take money out of the company.
I have a (high) debit current account
Then it is often interesting to spontaneously opt for the higher withholding tax in order to accelerate the reduction of the overdraft. This higher withholding tax usually outweighs the interest due on the debit current account.
I don't really need the money, but would like to have a higher credit current account
This situation requires some numerical work, but often early distribution is not advantageous. The additional interest that can possibly be obtained outweighs only slightly the additional valuation on the early benefit.
My company has cash in surplus, but I don't really need the money privately
An early payout may be of interest here, provided the money is private at least as well can be invested as through the partnership. However, if the partnership is through DBI-beveks can invest, it is often fiscally more interesting to invest the money a little longer in the company in such an investment product.
The shares of my partnership are already settled successionally and/or my partnership qualifies as a family partnership
Even then, the answer is not black and white, but in some cases it is more appropriate to allocate resources than keep it in the company a little longer. As long as these remain in the company, they are also inherited.
At the time the money is taken out of the partnership, it forms a separate part of your assets, so there may well be a tax burden arises in your succession.
I am going to liquidate my company in the near future
If the liquidation reserves are distributed upon liquidation, there is no withholding tax due. If possible, it is then best to wait until liquidation to distribute the liquidation reserve.
I am going to sell the shares of my company
Again, this is not a black-and-white answer. In this situation, the question is Whether or not the company has excess financial resources. If the company can spare certain sums of money, it can be interesting to pay out early, especially if the company's cash position cannot be (fully) accounted for in the sale price or if a discussion about "excess cash" can be avoided in this way.
Conclusion
The ability to distribute liquidation reserves early provides in certain situations fiscal and financial benefits, but it is not always the best solution. Whether or not it is interesting depends very much on your personal and corporate context.
Therefore, be well advised and make thoughtful trade-offs between immediate liquidity needs, fiscal impact and your long-term planning.
Do you have questions about this?
Please do not hesitate to contact your client manager.