How do you treat a management fee between a holding company and an operating company in the annual accounts?
For the operating company the management fee is an expense, for the holding company it is income. What is still outstanding at the balance sheet date is a receivable for the holding company and a liability for the operating company, both on group companies. In the related-party notes the fee belongs only if it is not at arm's length, and not for a micro, small or medium-sized BV.
The short answer
For the operating company the management fee is an expense, for the holding company it is income. What is still outstanding at the balance sheet date is a receivable for the holding company and a liability for the operating company, both on group companies. In the related-party notes the fee belongs only if it is not at arm's length, and not for a micro, small or medium-sized BV.
Updated 30 October 2026
One amount, two sets of annual accounts
A holding company and an operating company are two legal entities, each with its own single-entity annual accounts under Dutch law. A management fee that the holding company invoices to the operating company therefore appears on both sides, with opposite signs. In consolidated annual accounts it falls away: what is charged within the group is eliminated (RJ 260 and RJ 217).
| Operating company | Holding company | |
|---|---|---|
| Profit and loss account | Expense: other operating expenses, or under the functional layout general management expenses (art. 2:377(3)(j) and (4)(e) DCC) | Income: net turnover if providing management is part of the holding company's business (art. 2:377(6) DCC), otherwise other operating income |
| Balance sheet at 31 December, not yet paid | Liability to group companies (art. 2:375(1)(f) DCC) | Receivable from group companies under current assets (art. 2:370(1)(b) DCC) |
| Balance sheet, paid in advance | Prepaid expense (accrued asset) | Deferred income (accrued liability) |
Whether the fee is net turnover for the holding company is a matter of the nature of the business. For special forms of activity where it is uncertain whether amounts belong to net turnover, RJ 270.203 requires an explanation in the notes.
Which financial year: what is already owed at the balance sheet date
The fee belongs in the year to which the service relates. If the holding company only invoices December in January, the amount still falls in the financial year ending on 31 December, as a receivable and as costs still to be paid respectively (accruals and deferrals). If you only agree after the balance sheet date that there will be a fee for the past year, you must assess whether an obligation already existed at the balance sheet date. If not, the fee belongs in the next financial year. So record the agreement in writing beforehand, with the service, the amount and the calculation.
Related parties: when the fee must be in the notes
The holding company and the operating company are related parties of each other; for the definition the Dutch law refers to IAS 24. The notes only need to mention material transactions that were not entered into on normal market terms, with their size, the nature of the relationship and whatever else is needed for insight (art. 2:381(3) DCC; RJ 330). An arm's-length fee need not be disclosed; the RJ recommends voluntary disclosure (RJ 330.201). Disclosure of transactions within the group may be omitted if the subsidiaries that are party are wholly owned by members of the group.
| Class | Fee in the related-party notes |
|---|---|
| Micro (balance sheet total ≤ € 450.000) | No |
| Small (balance sheet total ≤ € 7,5 mln) | No (art. 2:396(5) DCC); voluntary disclosure is possible (RJk B18.102) |
| Medium-sized (balance sheet total ≤ € 25 mln) | BV: no; NV: only transactions with major shareholders, directors and supervisory directors |
| Large | Yes, if the fee is not at arm's length and is material; not for a subsidiary wholly owned by the group |
If the fee is in fact the remuneration of the director-major shareholder (DGA) for his work as director of the operating company, it may count as remuneration of directors (art. 2:383(1) DCC); a disclosure that can be traced to one person may be omitted. For a small and a micro BV paragraph 1 does not apply.
VAT and tax: in brief
Whether VAT is charged on the fee depends, among other things, on whether the holding company is a VAT entrepreneur and whether the BVs form a fiscal unity; under conditions a holding company can be part of a fiscal unity (Dutch Tax Administration). For the annual accounts the amount counts without deductible VAT (balance sheet including or excluding VAT). Whether the amount of the fee is at arm's length is a separate tax test, which does not coincide with the related-party notes. Have your tax adviser establish that.
Case: Bakker Holding and Bakker Metaalwerk
Bakker Holding BV invoices Bakker Metaalwerk BV for 2025 a fee of € 6.000 per month, € 72.000 per year (all amounts excluding VAT). Metaalwerk paid January through November (€ 66.000); December is outstanding. The BV has a balance sheet total of € 2,1 million and is small.
| Line item | Bakker Metaalwerk BV | Bakker Holding BV |
|---|---|---|
| Result before the fee | € 310.000 | – |
| Management fee | expense € 72.000 | income € 72.000 |
| Holding company's own costs (accountant, interest) | – | expense € 18.000 |
| Result before tax | € 238.000 | € 54.000 |
| December outstanding, 31 December 2025 | liability to group company € 6.000 | receivable from group company € 6.000 |
Because Metaalwerk is small, the fee need not be in the related-party notes; the amount is, however, in the P&L and on the balance sheet. Variant: Metaalwerk is large, 70% owned by the holding company and 30% by an external investor, and a firm estimates the arm's-length fee at € 48.000. Then € 24.000 is not at arm's length. The notes then mention the transaction of € 72.000, the relationship (parent company) and that the amount deviates from the market.
Where it goes wrong
- Booking only the operating company's side, so that the current account between the two BVs does not balance.
- Agreeing the fee for the past year after the balance sheet date and still including it in that year.
- Putting the outstanding amount under other receivables or other liabilities, instead of separately as group company.
- Treating the fee as a dividend or as a loan without the facts pointing that way.
How it works at Jaarrekening.io
The questionnaire for the notes in Jaarrekening.io asks the related-party questions only where the law requires them: for a large company per category, for a medium-sized BV not, for a small company as a voluntary question. The app does not book a management fee itself; you supply it with your trial balance or XAF export.
Sources
- Art. 2:377 DCC: layout of the profit and loss account, text applicable from 1 July 2026 (wetten.overheid.nl)
- Art. 2:381 DCC: related-party notes (paragraph 3), text applicable from 1 July 2026 (wetten.overheid.nl)
- Art. 2:370 DCC: receivables, text applicable from 1 July 2026 (wetten.overheid.nl)
- Art. 2:375 DCC: liabilities, text applicable from 1 July 2026 (wetten.overheid.nl)
- Art. 2:396 DCC: small legal entities, text applicable from 1 July 2026 (wetten.overheid.nl)
- Dutch Tax Administration (Belastingdienst): conditions for a fiscal unity (VAT)
Frequently asked questions
Is a management fee turnover for the holding company?
That depends on the nature of the holding company's business. Net turnover is the income from the supply of goods and services from the legal entity's business (art. 2:377(6) DCC). If the holding company structurally supplies management services, the fee is net turnover; otherwise it is under other operating income. Where there is doubt about special forms of activity, RJ 270.203 requires an explanation in the notes.
Must a management fee be in the related-party notes?
Only if the fee is material and was not agreed on normal market terms (art. 2:381(3) DCC). The duty does not apply to a micro, small or medium-sized BV (for a medium-sized NV it is limited to major shareholders and directors); it does apply to a large legal entity. You may disclose an arm's-length fee voluntarily (RJ 330.201).
How does an unpaid management fee appear on the balance sheet?
For the holding company as a receivable from group companies (art. 2:370(1)(b) DCC), for the operating company as a liability to group companies (art. 2:375(1)(f) DCC). Both amounts must be equal; a difference points to a booking error or a cut-off difference.
May I agree the management fee retroactively?
For the annual accounts what counts is whether an obligation existed at the balance sheet date. If the fee is only agreed afterwards, it belongs in principle in the next financial year. Tax law and civil law have their own requirements; so record the agreement in writing beforehand.
Do I have to charge VAT on the management fee?
That is a VAT question, not an annual accounts question: it depends, among other things, on whether the holding company is a VAT entrepreneur and whether a fiscal unity exists. In the annual accounts the fee is shown without deductible VAT. See the conditions on belastingdienst.nl or ask your adviser.
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