Sole trader or BV? The turnover where incorporating starts paying, for a developer

Why the comparison is usually rigged

Most sole-trader-versus-company comparisons cheat in one of two ways. Either they compare a sole trader’s take-home against a company’s take-home while quietly leaving profit sitting inside the company — money you have not actually received and will be taxed on again when you extract it — or they ignore what a company costs to run. Both make incorporating look better than it is.

The table below does neither. Both structures put every available euro in your pocket in the same year, and the company case then has €3,000 of annual running cost subtracted: accountant, filings, and the administrative overhead a BV carries and a sole trader does not.

The table

Turnover, then net in pocket as a sole trader, then net in pocket through a BV after running costs. €12,000 of business expenses throughout; company shares assumed VVPR-bis eligible and seasoned; the director’s salary set to €51,000 where the profit allows it, to keep the reduced 20% corporate rate.

• €45,000 turnover — sole trader €20,655 · BV €17,655 after costs. The BV loses.
• €55,000 — sole trader €24,935 · BV €21,935. Still losing: the whole profit goes out as salary anyway, so the company adds cost and nothing else.
• €65,000 — sole trader €29,039 · BV €26,530. Still behind.
• €75,000 — sole trader €33,143 · BV €33,090. The crossover — a €53 difference, which is noise.
• €85,000 — sole trader €36,873 · BV €39,650. Now €2,777 ahead.
• €110,000 — sole trader €46,739 · BV €56,050. €9,311 ahead.
• €132,000 — sole trader €56,091 · BV €70,482. €14,391 ahead.

Why the line sits there

A BV’s advantage comes from taxing profit at 20% or 25% inside the company and then paying a reduced dividend withholding, instead of running everything through progressive personal rates. That only helps if there is profit left after your salary. Below roughly €63,000 of turnover, a €51,000 salary plus €12,000 of costs consumes the entire turnover — there is no profit to tax at the company rate, so the BV is a sole trader wearing a more expensive hat.

Above that point, every additional euro of turnover becomes profit taxed at 20% and distributed at 18% rather than salary taxed at marginal rates approaching 50% plus social contributions. The gap widens with every extra billable day.

What the table does not capture

The numbers are only part of the decision, and the rest genuinely matters for a contractor.

• Limited liability — the actual legal point of a BV, worth something on its own if you sign contracts with liability clauses
• Timing flexibility — a company lets you leave profit inside and distribute it in a leaner year, which a sole trader cannot do
• VVPR-bis needs three financial years to season, so incorporating today prices in a benefit you cannot use yet
• The €51,000 salary condition does not apply in a small company’s first four taxable periods — so a young BV keeps the 20% rate on a low salary, which moves the crossover in its favour. This table assumes the condition applies, making it the conservative case
• Incorporation itself costs money and a financial plan, and dissolving a company costs more
• The €3,000 running cost is a modelling assumption — get a real quote from your accountant, since it moves the crossover directly

The practical reading

If you are billing under €65,000, stay a sole trader and revisit the question when your rate or your booked days rise. If you are consistently over €85,000, the company is likely already costing you money in tax you did not have to pay. Between the two, the tax answer is close enough that liability and flexibility should decide it, not the arithmetic.