Joint ownership between a company and its shareholder
Not a good idea
Whoever owns real estate together with another person can put an end to that
co-ownership by resigning from joint ownership. Depending on the location of the
property, the distribution right amounts to 2.5% in Flanders or 1% in the other
two regions. However, if you are a co-owner, together with your own company, you
pay a sales tax of 12% or 12.5%. Why is that?
You have an NV (a capital company) and suppose that NV owns a building. If the
NV is liquidated and you are allocated the building, sales tax is due. Even if
you recover the building that you contributed yourself during this liquidation.
This sales tax amounts to 12% in Flanders and 12.5% in the other two
If you are a partner in a BV (a partnership) and you receive the real estate
during the liquidation, there are two options:
If you were not a partner at the time the BV acquired the property, you pay
If you were already a partner when the BV (or previously, BVBA) bought the
building, or if you contributed the building yourself, then you are a 'historic'
partner and you will end up in the waiting arrangement.
Such waiting arrangement means that you only have to pay a fixed fee during the
liquidation. The tax authorities then wait for what will happen next:
If you acquire the building with other partners who are all historical partners,
you can withdraw from joint ownership and only a distribution right is due.
However, if the building ends up with someone who is not a historical partner,
then sales tax becomes due.
Back door is a dead end street
In an NV you therefore do not escape the sales tax unless,
About ten years ago, the trend arose to purchase real estate as a shareholder
together with the company. For example, you buy 10% of the whole on which you
then have to pay the sales tax and your company buys the other 90% on which
the sales tax is also due, but that amount is deductible as a professional
After many years, for example if you want to stop the company, you will no
longer share ownership and take over the companys share. Is a distribution
right on that transaction sufficient?
No say the tax authorities. The regulation concerning the partners who acquire
immovable property from their own company is a special scheme, intended as an
anti-abuse provision. And that anti-abuse provision takes precedence over the
general distribution law scheme. The term 'tax' here refers to both the federal
tax authorities (which are still partially competent for the stamp duties) and
Vlabel, which is competent for the Flemish stamp duties.
From first instance, over Cassation to the Constitutional Court
A lot of ink has been spilled on this interpretation. Many taxpayers went to the
courts and tribunals, to end up before the Court of Cassation. One of the
arguments invoked was the violation of the principle of equality. However, that
is not the competence of the Court of Cassation, but of the Constitutional
Court. The principle of equality appears to have been violated in the sense that
the partner in joint ownership with his own company must pay a sales tax. While
only a distribution right is claimed from someone else, who is not a partner and
who is in joint ownership with the same company.
However, the Constitutional Court considers that this distinction is justified,
because the rule that a sales tax is due if the partner removes real estate from
his own company, is an anti-abuse provision, which effectively takes precedence
over the distribution right. One rightly asks what abuse is fought here. After
all, when the property was purchased, the duties were paid, partly by the
company and partly by the partner. But the decision of the Constitutional Court
puts an end to these discussions. Co-ownership between the company and one of
its partners is therefore best avoided.