VVPRbis: a small transfer with large consequences
Recently, there has been a lot of attention for VVPRbis in the media. This was mainly in the context of the expected change in the reduced rate from 15% to 18% within this regime.Now, what is VVPRbis again, and what do we need to take into account in order not to lose this status?
What is VVPRbis?
Dividend payments are in principle subject to 30% withholding tax.
VVPRbis is a tax regime that entitles shareholders-natural persons to a reduced withholding tax rate on the distribution of dividends. Provided that certain conditions are met, dividends can be distributed at a rate of 20% or 15%*.
*This rate of 15% may soon be increased to 18%
Conditions
To qualify as VVPRbis shares, the shares must meet the following conditions, among others:
- Issue date: the shares must have been issued as from 1 July 2013. They may have been issued when the company was incorporated, but also in the event of a later capital increase or additional contribution.
- Size of company: the company must qualify as a small company at the time of issue of the shares.
- Method of contribution: the issue of the shares was made in exchange for a fully paid-up contribution in cash. Contribution in kind (goods, labour) is not eligible.
- Ownership: the registered shares must remain in full ownership of the shareholder who made the contribution, without interruption.
- Rights: The shares may not have any preferential rights with regard to participation in the capital, profit or distribution of the share capital.
- Timing: The reduced rate only applies to dividends that are distributed:
- As of the second financial year following the contribution (for shares issued up to and including 31/12/2025) – rate: 20%;
- As of the third financial year after the contribution – rate: 15%.
Loss of VVPRbis status
The VVPRbis status is not untouchable. VVPRbis shares may lose their status when they are transferred.
A sale (even to a family member), contribution to a company or any other form of transfer of shares, can irrevocably lead to the loss of the VVPPRbis status.
Exceptions
In the following cases, a transfer does not result in the loss of the VVPRbis status:
- Succession: in the event of succession following death, in the direct line (children or grandchildren) and/or between spouses.
- Donation: in the case of a gift in full ownership to descendants (children or grandchildren) and/or between spouses.
- Restructuring: tax-neutral mergers and demergers (in specific circumstances).
Think before you transfer!
A small transfer can lead to a large tax loss if the above conditions are not met.
Therefore, before any transfer or contribution, it is important to check that this may not have a negative impact on the VVPRbis status of the shares concerned.
Our experts are happy to assist you with this.
