High DGA Interest Can Leave the BV Paying Before Cash Arrives

A shareholder loan needs annual creditor judgment, not a convenient correction years later.

The corporate-income-tax return is nearly finished when someone pauses at the shareholder receivable. Interest has been added again, but no money entered the BV. The balance grew, taxable profit rose, and the director-shareholder owes more than last year. Then comes the uncomfortable question: was the interest rate properly tested when the loan was made and reviewed?

This is familiar in owner-managed companies. The booking looks orderly. The cash position tells another story. A later recalculation may produce a lower rate, but that does not place the difference neatly in the latest open tax year.

A Noord-Holland District Court ruling, ECLI:NL:RBNHO:2026:9007, brings that tension into focus. The case concerned a historic correction of interest on a DGA receivable through the Dutch foutenleer. Its wider lesson reaches beyond one tax dispute. The foutenleer repairs a particular balance-sheet error. It does not move an old profit-calculation issue into a more convenient year.

The balance sheet is not a time machine

The Supreme Court has drawn the line clearly. The foutenleer applies where the closing equity of an earlier year was determined incorrectly under Dutch tax law and goed koopmansgebruik. Its purpose is to prevent profit from escaping taxation or being taxed twice.

That differs from an amount that affected profit incorrectly in an earlier year. A receivable or obligation can remain properly recorded on the balance sheet while the earlier profit calculation still requires its own tax treatment.

The distinction feels technical until it reaches the tax return. A founder sees one shareholder balance rolling through several years. Tax law sees annual profit calculations, assessment dates and separate correction routes. A current account may look continuous in the ledger, but it does not create one open tax period.

A later calculation can be commercially persuasive. The timing and legal basis must still fit the correction.

Interest income is not cash

The immediate business concern often sits outside the doctrine. When interest is added to DGA debt rather than paid, the BV records income but receives no cash. Corporation tax may become payable while the shareholder receivable continues to grow.

Imagine a holding company funding tax, advisory bills and an investment in its operating BV. Its accounts show interest income from the shareholder. That income cannot pay an invoice. It exists as a larger claim against the person controlling the company.

The mismatch becomes sharper when wages, rent and supplier bills fall due. The founder may need private liquidity. The debtor may prefer to postpone repayment. The BV still needs its own position. It must meet its bills and explain why the loan remains commercially sensible.

Belastingdienst guidance expects business-like loan terms, including an arm's-length interest rate. There is no universal percentage. Market rates matter, alongside repayment risk, term, payment timing, security and the choice between fixed and variable interest.

Those facts belong to the year in which the parties made the decision. A later spreadsheet can refine the calculation, but it cannot replace the commercial judgment that should have supported the loan when the interest was booked.

One question for the whole company

The central question is simple: what cash does the BV genuinely expect from the shareholder, on what date, and what happens if that cash does not arrive?

That question starts with interest and reaches the whole company. It tests whether the receivable supports the business or quietly competes with it. It also shows whether the company acts as a creditor or merely records private withdrawals after the event.

A useful annual review puts the ledger balance beside the agreed terms, actual payments, available security and present repayment capacity. It separates interest received from interest merely added to the debt. The file should also record why the rate remains appropriate and when the next review will occur.

When the rate changes, the commercial reason and effective date deserve attention before the next year-end entry. Once several returns have become final, the room for a clean tax and accounting position becomes narrower.

This discipline matters in ordinary business life. It becomes especially visible during financing, succession or a sale. A bank or buyer will look beyond the face value of the receivable. They will ask when cash will arrive and whether the shareholder can repay without relying on another distribution from the same BV.

Tax routes do not replace creditor judgment

The excessive-borrowing rules add another layer. Where the statutory conditions apply, part of the debt can lead to box 2 taxation. That treatment does not erase the civil-law loan. The full receivable remains, and the BV continues to administer the interest and other loan terms.

Procedural timing has its own place. An objection against a tax assessment generally has a six-week period. In some corporate-income-tax situations, a request for ambtshalve vermindering may remain available within the applicable five-year period. That route carries separate conditions.

An ambtshalve reduction request and the foutenleer serve different purposes. One is a procedural route concerning an assessment. The other concerns the treatment of an error in annual profit and closing equity.

Back at the tax return, the answer is not a reflexive corrective journal entry. The company needs to separate its questions. Was the earlier tax treatment supportable? Is a procedural route available? Does the present balance represent a real and collectable debt? Can the BV afford to keep financing it?

The quiet danger in a DGA loan is rarely the interest rate alone. It is the absence of an annual creditor decision. When that decision is made carefully, the tax return, ledger and cash plan tell the same story. When it is postponed, useful choices may close before the correction is considered.

The data, sourcing, and analysis behind this article were conducted by Linda Pavan Geraedts. AI was not used to identify sources, build the factual basis, or produce the analytical judgment contained here. AI was used only as a drafting aid. The final English text was personally reviewed, edited, and approved by Linda Pavan Geraedts before publication.

References

• Te hoge rente op dga-lening niet herstelbaar via foutenleer - Taxence
• Rechtspraak - Submitted court case
• Hoge Raad - Foutenleer: balance error versus earlier profit error
• Belastingdienst, Kennisgroep bijzondere winstbepalingen vpb - Current Belastingdienst position on the foutenleer
• Wettenbank - Statutory profit framework
• Belastingdienst - Business terms and pricing of a loan from the BV
• Belastingdienst - Loan documentation, repayment and security
• Belastingdienst - Current DGA debt pressure: excess borrowing does not end the loan