As a physician-business owner, you're likely seeking the most efficient ways to extract income from your company without incurring unnecessary taxes. Several options are available, each with its own fiscal implications. Below, we outline the primary methods to help you make informed decisions.
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As a physician-business owner, you're likely seeking the most efficient ways to extract income from your company without incurring unnecessary taxes. Several options are available, each with its own fiscal implications. Below, we outline the primary methods to help you make informed decisions.
I want to make an appointment.Your company can pay you a salary, which is subject to progressive personal income tax rates ranging from 25% to 50%, along with social security contributions up to 20.5%. From a tax perspective, this can be an expensive option. Therefore, it's advisable to keep the salary modest and align it with the company's tax burden.
As a shareholder, you can distribute dividends to yourself. Without tax optimisation, dividends are subject to a 30% withholding tax. However, various strategies can reduce this to 15% or even 10%, such as the VVPRbis regime or establishing a liquidation reserve. Note that these options often require a waiting period before distribution. Additionally, for private limited companies (BV) or cooperative companies (CV), you must comply with the balance sheet and liquidity tests.
Expenses incurred for your profession can be reimbursed on a flat-rate basis by your company, even if the actual costs are lower. Examples include daily allowances for professional travel or compensation for remote work. These amounts are tax-free for you and deductible for your company, provided they are recorded on the director's remuneration form 281.20.
You can rent your home office space to your company. The rental income is subject to personal income tax, but you can apply a flat-rate expense deduction of up to 40%, and no social security contributions are due. Be cautious: the maximum allowable rent depends on the property's cadastral income. If the rent is deemed excessive, it may be reclassified as salary
I want to make an appointment.Your company can lend you money through a current account. However, this is not free of charge: interest-free loans or loans with below-market interest rates result in a taxable benefit in kind. For 2024, the reference interest rate is 6.25% for loans without a fixed term and 6.80% for loans with a fixed term.
Distributing capital through a capital reduction or repaying contributed capital is possible, especially following recent statutory changes for capital-free companies. Since 2018, such distributions are no longer entirely tax-free if taxable profits remain on the balance sheet. However, liquidation reserves are excluded from the pro-rata calculation, often presenting opportunities.
An IPC allows you to build supplementary pension savings through your company. The premiums paid by the company are 100% tax-deductible. The maximum premium depends on the salary paid, adhering to the so-called 80% rule. Therefore, contributions cannot be made without limit.
Beyond these seven options, there are other ways to extract funds from your company. For instance, you can lend money to your company and receive interest in return. For the 2025 income year, you can earn a gross interest rate of 7.08% from your company, subject to a 30% withholding tax.
There is no one-size-fits-all solution. The optimal strategy depends on your personal circumstances, your company's financial health, and your future plans. Often, a combination of multiple techniques is the smartest approach.
