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It is possible to incorporate a BV with retroactive effect up to January 1 of the current financial year — but only under conditions. For a contribution subject to taxation, retroactive effect is limited to a maximum of 3 months (deadline April 1 for retroactive effect to January 1). For a contribution without taxation, the maximum is 9 months (deadline October 1). Both require a timely letter of intent to the Tax and Customs Administration plus incorporation within the statutory period. If you miss the deadline, the BV only commences operations from the date of incorporation.
The short answer: the deadlines
- Noisy contribution: maximum retroactive effect of 3 months. Practical deadline: April 1 (for retroactive effect to January 1).
- Silent contribution: maximum retroactive effect of 9 months. Practical deadline: October 1.
- the letter of intent with the Tax and Customs Administration before these deadlines.
- Incorporation of a BV within 15 months of the desired effective date (for tax-neutral incorporation).
Why retroactive effect?
Three main reasons:
- Clean financial year. The BV starts its own bookkeeping as of January 1st — no “half year income tax, half year corporate tax” hassle.
- Tax optimization. Sometimes it is advantageous to channel the profit for the entire year through the BV (lower corporate income tax rate instead of a progressive personal income tax rate).
- Administrative simplicity. One annual financial statement, one tax return, one financial year settlement.
The 3-month route (hissing)
With a noisy insertion, you may go back up to 3 months. Specifically:
- Do you want to move to January 1st? Then you must incorporate and file the letter of intent before April 1st.
- Did you miss April 1st? Then retroactive effect is only possible from a date that is still within 3 months.
- Advantage of non-revolving accounts: direct step-up in book values at the BV.
See also contribution with noise for tax details.
The 9-month route (silent)
With silent entry, you have more time:
- Until October 1st, with retroactive effect to January 1st.
- File the letter of intent before that deadline.
- The BV must subsequently be incorporated within 15 months after January 1 — no later than the end of March of the following year.
- Condition: obligation to continue for three years.
See silent input for explanation.
What if you miss the deadline?
If you miss October 1st (silent) or April 1st (noisy), your BV only starts from the date of incorporation. Practical consequences:
- Your sole proprietorship continues up to the date of incorporation — income tax profit for that period.
- The BV starts with a broken financial year (from incorporation to December 31).
- Two returns required: income tax for the sole proprietorship (part of the year) and corporate income tax for the BV (part of the year).
- Extra administrative hassle; often higher accounting costs that first year.
Wait until January 1st next year and tackle it properly then — or pay for the extra work this year.
The letter of intent
The letter of intent is not an “application” but a notification: I am going to contribute this business in accordance with Article 3.65 (silent) or as a contribution subject to taxation. What it states:
- Name and BSN of the submitter.
- Description of the business being contributed.
- Desired start date (often January 1).
- Mention of noiseless or noisy route.
- Optional: details of the BV to be incorporated (if already known).
The accountant or tax advisor usually arranges this in the run-up to the incorporation.
Step-by-step plan
- Decide before July 1st whether you want silent or hissing.
- File letter of intent before October 1 (silent) or April 1 (noisy).
- Plan the incorporation with a notary within the statutory period after the effective date.
- Update administration: Chamber of Commerce, VAT, contracts with retroactive effect (where possible).
- Separate accounting: allocate revenue from January 1 to the new BV.
Honest recommendation
Retroactive effect is technical, but in practice a matter of two deadlines: April 1 (with incorporation) or October 1 (without incorporation). If you miss them, your BV will only start operating from the date of incorporation — not a disaster, but a messier first year. Plan ahead, have an accountant draft the letter of intent, and stick to the deadlines.
For the broader context: converting a sole proprietorship to a BV.
Frequently Asked Questions
Yes, subject to conditions. For a contribution with taxable income, a maximum of 3 months back; for a contribution without taxable income, a maximum of 9 months. Requires a timely letter of intent to the Tax and Customs Administration and incorporation within the statutory period.
For contribution with a taxable effect: April 1. For contribution without a taxable effect: October 1. File the letter of intent with the Tax and Customs Administration before that date. If you miss the deadline, your BV will only start from the date of incorporation.
A notification to the Tax and Customs Administration that you will contribute your sole proprietorship to a BV as of a specific date, following the tax-neutral or tax-neutral route. Not an application, but a formal notification that guarantees retroactive tax effect.
Statutory choice (Art. 3.65 Income Tax Act). A silent contribution has a longer time limit (9 months) because a more complex tax benefit is attached to it; a noisy contribution is fiscally simpler and has been assigned a shorter time limit (3 months).
Revenue and costs from the retroactive date (often January 1) are allocated to the BV. Registration with the Chamber of Commerce takes place on the date of incorporation, but for tax and administrative purposes, the BV commences on January 1. Discuss with your accountant how to process this in the bookkeeping.
Not a disaster, but certainly messier. Your BV starts from the date of incorporation; your sole proprietorship continues until then under the income tax sphere. Two returns (income tax and corporate tax) covering partial years. It is often wise, then, to start again only on January 1st of the following year.
Generally not. The Tax and Customs Administration strictly enforces these deadlines; the statutory regulations offer no leeway for extensions. In exceptional circumstances (illness, death), a request can sometimes be made — but do not count on it.
