A real estate company rents out approximately 176 homes. The tax authorities impose additional payroll tax assessments with a penalty over five calendar years. Over each of these years, the BV awarded €10,386 in salary for the director-major shareholder (DGA). According to the tax authorities, this is far too low and should average €80,000 per year. The BV goes to the tax court.

BV position

The additional assessments were wrongly imposed because the correction of the usual salary is incorrect. To determine the usual salary, the tax authorities make a comparison with the director of a housing association. This function is not very comparable because the BV manages far fewer homes than a housing corporation, has fewer staff and the director's position is less burdensome. Moreover, the tax authorities have not taken into account the fact that the DGA works part-time, namely 1 day a week.

Legislative regulation

In short, under the law, a DGA's taxable salary is set at least the following amounts:

the salary from the most comparable employment relationship;

the highest salary of the employees employed by the BV;

the statutory standard amount (in 2025: €56,000).

Most comparable employment?

The burden of proof for taking into account a higher usual salary than the standard amounts lies on the tax authorities. It states that the director of a housing association is the most comparable employment relationship and bases the usual salary on that.

Although the activities of the DGA cannot be fully equated with those of a director of a housing association, according to the court, the tax authorities have made it plausible that the director of a housing association is the most comparable employment.

The tax authorities then sought to link the remuneration of a director in remuneration class B (belonging to a company size of 0-750 rental units) and took 75% of this as a starting point. According to the judge, with this 25% cut, the tax authorities took sufficient account of the differences between the activities of the DGA and the director of a housing association. Moreover, the BV itself has not invoked any other more comparable employment.

Part-time?

The BV states that the DGA does not work full-time for her and only works for her 8 hours a week (20%). On the basis of the documents, the judge does indeed consider it plausible that the DGA does not work full-time. The tax authorities therefore assume that the usual salary is too high.

However, the BV has the burden of proof to make its 20% employment contract and the associated remuneration plausible. And in any case, the burden of proof to achieve a lower usual salary than the standard amounts lies on the BV.

The BV has argued that, in view of the phasing out of the DGA's activities in connection with his retirement, the DGA's age, the BV's declining housing stock and the statements of the (other) employees, the DGA's activities for the BV cover a maximum of 8 hours a week. According to the BV, in addition to a part-time percentage of 20%, a 40% discount should be applied to the remuneration of a director of a housing association due to the smaller number of homes that the BV owns compared to a housing association in the category of remuneration class B. In addition, the amounts should be reduced by 30% as the director of a housing association performs a heavier function than the DGA. According to the BV, the usual salary should actually be lower than the €10,386 used.

According to the judge, however, the BV has failed in its burden of proof. The judge considers the amount of usual salary used by the BV of €10,386, let alone the lower amounts mentioned by the BV above, not plausible and inappropriate for the DGA's function. The BV did not make the part-time factor of 20% and the reduction rates it mentioned plausible in the face of the motivated objection of the tax authorities.

Judge's opinion

The judge sets the usual salary at the standard amounts, to which no part-time factor is applied. In this case, that is approximately a correction of half of the difference between the tax authorities's correction amounts and the salary that the BV had used.

Please note: Even in usual wage cases, the distribution of the burden of proof often determines the outcome. The judge must make a choice based on the evidence. Sometimes, like here, he doesn't seem to know either and ends up somewhere in the middle.