Resources Taxing and accounting Distributing profit from the company

Distributing profit from the company

If you want to withdraw money from the company you have two options:

1. distributing profit;
2. receiving remuneration from the company.

As a shareholder you are entitled to receive dividend from the company. If you chose to do so the company has to pay 5% dividend tax on the distributed amount.

Example: David – the sole shareholder of CoolCompany Ltd. decides to distribute the whole company profit after taxes as dividend. Instead of transferring €9000 to David CoolCompany Ltd only transfers €8550. The rest (€450) is dividend tax. At the end CoolCompany Ltd has paid 14.5% tax on the profit.

As a company manager you are entitled to receive remuneration from the company. Remunerations are company expenses and are thus deducted from the company profit. The company doesn’t own taxes but the receiver owns a 10% income tax over the amount he has received.

Example: Instead of distributing profit David opts for monthly remuneration of €1000. Income tax is paid in advance on a monthly basis so each month CoolCompany Ltd. will pay David €900.