Short-term settlement or permanent finance
When a current account becomes a loan
A rekening-courant is useful for small amounts that arise and are settled continuously. It does not turn long-term owner finance into an ordinary bookkeeping item.
Start with the situation
The 31 December balance is €15,500. In July it reached €20,500.
The owner looks only at the year-end rekening-courant balance and assumes that no interest is needed. The Dutch Tax Administration’s simplification, however, depends on the maximum balance throughout the year.
Another €16,000 balance remains unchanged for ten years. Although below €17,500, it behaves like permanent financing rather than promptly settled current-account items.
Main questionDoes the money genuinely move and settle — or does the ledger line conceal a long-term loan?
Monthly review
The year-end figure does not show the maximum.
Three points in one year.
- 01January
- €10,500
- 02July
- €20,500
- 03December
- €15,500
The threshold was exceeded in July; interest and the character of the debt must be reviewed using the full history, not the December balance.
This example illustrates the public guidance and is not an accounting calculation.
A current account describes movement. A permanent balance with one purpose requires separate loan terms.
The Loan Health Check separates short-term settlements from structural owner finance.
What a rekening-courant is
A rekening-courant records ongoing settlements between an owner and the BV. The company pays a small private amount, the owner reimburses it, and another item may later move in the opposite direction. The balance changes and is settled within a reasonably short period.
The Dutch Tax Administration allows a simplification: no interest is required if the balance never exceeds €17,500 at any point during the calendar year. The simplification applies to genuine ongoing settlements, not every debt below that amount.
One day above €17,500 changes the calculation
In January an owner owes the BV €10,500. In July the company pays another €10,000 on the owner’s behalf, taking the balance to €20,500. The owner repays €5,000 in December, so the year ends at €15,500.
The year-end number is not the only test. The balance exceeded the threshold in July, and the Dutch Tax Administration states that interest then applies to the full balance rather than only the amount above €17,500.
€16,000 for ten years is not a current-account item
Another owner receives €16,000 and leaves it outstanding for ten years. The balance is below €17,500, but the transaction behaves like permanent finance: money does not move both ways and is not settled promptly.
The Dutch Tax Administration gives a comparable example as a loan rather than an interest-free current-account balance. Purpose, agreement, term, interest, repayment and arm’s-length review are therefore required.
Why the distinction matters to the family
A current account can grow quietly as private tax, holidays, renovation, purchases and advances accumulate in one line. Years later, nobody remembers the purpose of each amount and the BV has effectively financed the owner’s lifestyle.
The balance does not disappear on death or business transfer. It remains a claim of the BV against the owner or estate and affects company value, the private estate and family liquidity.
Restore order without false precision
Export the monthly balance, identify the maximum and separate recurring small settlements from amounts with a lasting purpose. For the structural part, decide whether a separate loan agreement and repayment route are needed.
Then set an internal limit, settlement period, review frequency and person responsible for alerting the owner. That prevents the family from discovering the problem only after the year has closed.
Public materials
For independent review
These sources help verify the public background to the question. They do not replace a fact-specific review.
Business continuity
Value, voting power and management do not have to move together.
Separate the three functions so the family knows who benefits economically, who makes ownership decisions and who runs the company.
- 01Value
Economic benefit
- 02Vote
Owner decisions
- 03Management
Daily operation
Conclusion after the explanation
Look at size, duration, movement and purpose rather than the ledger label. Structural debt needs loan terms.
Signals
Review this if you recognise your situation
- the balance grows for several years and rarely returns to zero
- a year-end balance below €17,500 is used without checking the maximum during the year
- large private costs continue to be booked as current-account items
- the family does not know that the balance is a company claim against the owner
Next actions
What to do next
- 01export monthly balances and identify the maximum for the year
- 02separate short-term settlements from permanent finance
- 03document the structural debt separately and include it in the annual Owner-director and BV Loan Health Check
Apply it to your situation
Owner-director and BV Loan Health Check
A short map of open questions: who owes whom, why the money moved, what was agreed, how the parties behaved and which review should happen next.
Open the checklistProfessional review
Owner-director and business succession control
A Dutch owner-director (directeur-grootaandeelhouder) combines a substantial shareholding with daily management. The work begins with the successor, authority, family liquidity and the founder's reserve. The group is then opened up across assets, the holding chain, property, ownership periods and planned changes. Only after that map does a specialist separately confirm the Dutch gift-and-inheritance-tax business succession relief and the substantial-interest income-tax rollover.
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