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Booking income tax (IB)

Accounting  — Wed 8 Jun 2022

Income tax, often abbreviated to IB, is not a business tax. Still, some business owners remit their profit tax via the IB declaration, it depends on the legal form of your business.

If your company has a legal form without a legal personality, such as a sole proprietorship for example, then you also pay the profit tax of your company through the IB declaration. Does your company, however, have a legal personality, such as a private limited company (BV)? Then you only provide private information on your IB declaration. The profits of your enterprise are then taxed via the corporate income tax (VPB) declaration.

After filing your IB tax declaration, you transfer an amount to the Belastingdienst. You normally transfer this amount from your private account and not from your business account. IB is not a business tax and therefore does not belong in your company's accounts. In addition to paying IB, you often simultaneously pay an income-related contribution to the Health Insurance Act (ZVW). This is also a private tax, which you pay from your private account.

Pay IB/ZVW from a private account

If you pay yourself a fixed amount per month as salary from your company, you may not want the IB/ZVW declaration to take a bite out of this. In this case, you pay yourself a little extra in the month that you transfer these amounts to the Belastingdienst. You do this once and separately from your standard salary, for example exactly the amount of IB and ZVW combined. If you also note with that bank transaction that it was for IB and ZVW, then it is always easy to trace afterwards.

Pay IB/ZVW from a business account

It may still occur that you do want to pay IB/ZVW from your business account. Usually only in the case of an unincorporated business, such as a sole proprietorship. This saves unnecessary transfers from business to private and then on to the Belastingdienst. Transferring directly from the business account is fine from an accounting perspective.

In that case, transfer them from your business account to the Belastingdienst. After that, connect the transactions to the balance category 'Opnames' of yourself. You can find that under 'Ondernemingsvermogen' → 'PrivĂ©' → 'Bart' → 'Opnames', if your name is Bart. By linking the transactions this way, it is effectively the same as transferring the money to your private account first. The only difference is that it is now directly deducted from your capital in your company, without taking it as salary.