Law: Title 9 Book 2 DCC

Article 2:398 DCC: additional rules for the size class

Q: Which size class applies in my first financial year?

The class that follows from the figures on the balance sheet date of the first financial year. That class applies to the first and the second financial year (art. 2:398(1) DCC), even if the figures at the end of the second year are higher. From the third financial year the ordinary rule of two consecutive balance sheet dates applies.

Q: When does the size class of my BV change?

Only when the BV no longer meets two of the three requirements of its class on two consecutive balance sheet dates. That follows from the words 'without interruption thereafter on two consecutive balance sheet dates' in articles 2:395a, 2:396 and 2:397 DCC. One year above or below the threshold does not change the class.

Q: Can the general meeting opt for a heavier regime?

Yes. The general meeting can decide, no later than six months after the start of the financial year, not to apply the exemptions for micro, small or medium-sized entities (art. 2:398(2) DCC). For a financial year equal to the calendar year that is 30 June at the latest. Choosing a lighter class than the figures give is not possible.

Q: Do the raised thresholds already apply to 2023?

At your option. The amounts of the Implementation Decree on the Directive increasing the thresholds are mandatory for financial years beginning on or after 1 January 2024 and could already be applied to financial years beginning on or after 1 January 2023 (Stb. 2024, 52, art. 4). The comparative balance sheet date could therefore also be tested against the new amounts.

Q: How do I test a first financial year that is shorter or longer than twelve months?

The law gives no rule for this. RJ 315.103 recommends converting net turnover to twelve months; for a long financial year the turnover of the last twelve months may be used. You test assets on the balance sheet date and employees as an average over the financial year.

Q: Does a foundation count the turnover of its enterprise?

Yes. A foundation or association under Title 9 tests its size with its own assets, but with the turnover and staff of the enterprise or enterprises it runs (art. 2:398(5) DCC). Whether it falls under Title 9 also depends on that turnover: two years in a row at least half of the turnover threshold for small (art. 2:360(3) DCC).

Article 2:398 DCC supplements the size rules. In the first and second financial year, the balance sheet date of the first financial year decides. The general meeting can decide, no later than six months after the start of the financial year, not to apply exemptions. Public-interest entities and investment institutions are excluded, participation companies from micro. Paragraph 4 is the basis for the 2024 increase.

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The short answer

Updated 30 October 2026

Key facts

Governs	First and second financial year (paragraph 1), decision of the general meeting (paragraph 2), exclusions (paragraphs 3, 6 and 7), adjustment of the amounts (paragraph 4), foundation and association (paragraph 5)
Current thresholds	Micro: assets ≤ € 450.000, net turnover ≤ € 900.000 and < 10 employees. Small: assets ≤ € 7,5 million, net turnover ≤ € 15 million and < 50 employees. Medium-sized: assets ≤ € 25 million, net turnover ≤ € 50 million and < 250 employees
Since	Financial years beginning on or after 1 January 2024; at your option for financial year 2023 (Stb. 2024, 52, art. 4)
Text	In force since 22 June 2024: paragraph 4 has since also mentioned the micro amounts (Stb. 2024, 174); identical for financial years 2025, 2026 and 2027
Elaboration	RJ 315.101 to 315.107; RJk M1.105 to M1.109

The two-year rule on which article 2:398 builds

The three class articles (2:395a, 2:396 and 2:397) use the same formula: an entity gets the exemptions if it meets two or three requirements on two consecutive balance sheet dates, and keeps them until it no longer meets them on two consecutive balance sheet dates. One deviating year therefore changes nothing. Article 2:398 regulates what that formula leaves open: the start, the choice to leave exemptions unused, who falls outside and how the amounts are adjusted.

An example of our own with four balance sheet dates, for a BV that was small for 2023:

Balance sheet date	Assets	Turnover	Employees	Meets small?	Class for that financial year
31-12-2024	€ 6,9 million	€ 16,2 million	54	No (1 of 3)	Small: only one date missed
31-12-2025	€ 7,9 million	€ 17,0 million	58	No (0 of 3)	Medium-sized: two dates missed
31-12-2026	€ 7,2 million	€ 14,6 million	49	Yes (3 of 3)	Medium-sized: only one date met again
31-12-2027	€ 7,0 million	€ 14,1 million	47	Yes (3 of 3)	Small: two dates met

For 2025 and 2026 this BV is medium-sized, with a management report and an audit. From 2027 it is small again. Anyone using the size class calculator therefore always enters two balance sheet dates.

Seven additional rules, paragraph by paragraph

Paragraph 1: the first and second financial year

Article 395a, article 396 or article 397 also applies for the first and second financial year to an entity that met the relevant requirements on the balance sheet date of the first financial year.
Art. 2:398(1) DCC (unofficial translation)

A new entity does not yet have two balance sheet dates. The class of the first balance sheet date therefore applies to the first and the second financial year, even if the figures at the end of the second year would give a different class. RJ 315.106 confirms this also for a new entity that would already be large at the end of the second year. From the third financial year the ordinary two-year rule applies.

Paragraph 2: the general meeting can leave exemptions unused

Article 395a paragraphs 3 to 7, article 396 paragraphs 3 to 8 and article 397 paragraphs 3 to 7 apply insofar as the general meeting has not decided otherwise no later than six months after the start of the financial year.
Art. 2:398(2) DCC (unofficial translation)

Within six months after the start of the financial year, so for a calendar year no later than 30 June, the general meeting can decide that the entity does not use the exemptions. A small BV thus becomes subject to a statutory audit, for example, because art. 2:396(7) DCC then no longer applies. 'Insofar' leaves room to leave only part of the exemptions unused. Notably, paragraph 2 mentions paragraphs 3 to 7 of art. 2:395a and 2:397, not paragraph 8, and paragraphs 3 to 8 of 2:396. Without a decision, the board may also voluntarily include more than the law requires.

Paragraph 3: investment institutions

Articles 395a to 397 do not apply to an investment company or undertaking for collective investment in transferable securities to which article 401(1) applies.
Art. 2:398(3) DCC (unofficial translation)

An investment company or UCITS to which art. 2:401(1) DCC applies gets no size exemption at all, regardless of its size.

Paragraph 4: raising and lowering the amounts

By order in council, the amounts mentioned in article 395a(1), article 396(1) and article 397(1) are lowered if the law of the European Communities so requires, and may be raised, insofar as permitted.
Art. 2:398(4) DCC (unofficial translation)

On this basis the Implementation Decree on the Directive increasing the thresholds of 5 March 2024 raised the amounts by 25% for inflation (micro by 28.6% due to rounding): micro to € 450.000 and € 900.000, small to € 7,5 million and € 15 million, medium-sized to € 25 million and € 50 million. The decree applies to financial years beginning on or after 1 January 2024 and could already be applied to financial year 2023 (Stb. 2024, 52, art. 4). When micro was introduced, it was forgotten to make paragraph 4 also apply to article 2:395a; the explanatory memorandum derived the power from the system of the law. Since 22 June 2024 it says so expressly (Stb. 2024, 174). The employee numbers remained the same.

Paragraph 5: the foundation or association with an enterprise

For the application of articles 396(1) and 397(1) to a foundation or an association as referred to in article 360(3), the starting point is the total assets of the foundation or association and, subject to article 396(2), the net turnover and the average number of employees of the enterprise or enterprises that this foundation or association maintains.
Art. 2:398(5) DCC (unofficial translation)

A foundation or association falls under Title 9 if its enterprise or enterprises achieve a net turnover of at least half of the turnover threshold for small for two years in a row (art. 2:360(3) DCC), now € 7,5 million. For its size class the foundation counts its own assets, but the turnover and employees of the enterprise it maintains.

Paragraph 6: participation companies not micro

Article 395a does not apply to a participation company as referred to in article 2, point 15, of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC (OJ EU 2013, L 182).
Art. 2:398(6) DCC (unofficial translation)

A participation company acquires holdings in order to manage them and make them profitable without interfering in their management. It cannot be micro, even if it is very small; it then falls under small. A DGA holding that directs its operating company is not a participation company.

Paragraph 7: public-interest entities

Articles 395a to 397 do not apply to entities that, as a public-interest entity:
a. have securities admitted to trading on a regulated market of a member state within the meaning of article 4(1), point 14, of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments (OJ EU 2004, L 145);
b. are credit institutions within the meaning of article 3, point 1, of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ EU 2013, L 176), and are not institutions as referred to in article 2(5) of that Directive 2013/36/EU;
c. are insurance undertakings within the meaning of article 2(1) of Council Directive 91/674/EEC of 19 December 1991 on the annual accounts of insurance undertakings (OJ EC 1991, L 374); or
d. are designated by order in council because of their size or function in society.
Art. 2:398(7) DCC (unofficial translation)

Listed companies, banks, insurers and organisations designated by order in council get no size exemptions, even if they would be small by size.

Case: a new BV with a short first financial year

Velde Robotics BV (fictitious) was incorporated on 1 March 2025; the first financial year ends on 31 December 2025 and therefore lasts ten months. On that balance sheet date: assets € 380.000, net turnover € 1.050.000 and an average of 6 employees.

Assets: € 380.000 does not exceed € 450.000. Met.
Turnover: € 1.050.000 exceeds € 900.000. Not met. The law does not say how a short financial year counts. RJ 315.103 recommends converting turnover to twelve months: 1.050.000 × 12 / 10 = € 1.260.000, also not met.
Employees: 6 is fewer than 10. Met.

Two of three: Velde Robotics is micro for 2025, and by paragraph 1 also for 2026, even if at the end of 2026 it has € 1,4 million turnover and 12 employees. For 2027 the ordinary rule applies. If on 31 December 2026 and 31 December 2027 it does not meet the micro thresholds but stays within those for small, it is small for 2027. For the average number of employees, RJ 315.103 recommends counting in person-years of employees with an employment contract; the law itself gives no rule for this.

Variant: a decision to have it audited anyway

Suppose Velde Robotics' bank demands an audited set of annual accounts for 2026 when financing in 2026. The general meeting can then decide no later than 30 June 2026 not to apply the exemptions for 2026. After 30 June that is no longer possible for 2026; a voluntary audit is then the only way.

The transition to the higher thresholds in 2023 and 2024

The increase applied mandatorily from financial year 2024 and at your option for financial year 2023. When testing a financial year, the entity could also test the comparative balance sheet date against the new amounts, according to the explanatory memorandum to the decree.

An example. Drukkerij Marsman BV (fictitious) had € 6,3 million in assets, € 12,8 million turnover and 52 employees on 31 December 2022, and € 6,6 million, € 13,4 million and 53 on 31 December 2023. With the old thresholds (€ 6 million and € 12 million) it met two requirements on neither date: medium-sized. With the new thresholds it met two on both dates: small. If it chose the new amounts for 2023, it was already small for 2023 and not subject to an audit requirement. From financial year 2024 that choice no longer exists: the new amounts apply.

Where the size test often goes wrong

Switching class after one year. Only two consecutive balance sheet dates count, except in the first and second financial year.
Forgetting the group. A group head counts the group companies, unless it applies art. 2:408 DCC.
Taking the paragraph 2 decision too late. After six months into the financial year, the general meeting can no longer switch off the exemptions for that year.
Counting heads instead of averages. What matters is the average number of employees over the financial year.
Combining IFRS and exemptions. Whoever applies IFRS cannot use section 11 (art. 2:362(9) DCC; RJ 315.104).

Where the size test is elaborated further

For financial years 2025, 2026 and 2027 the same text and the same amounts apply. The RJ elaborates the test in RJ 315.101 to 315.107, the RJk for micro in M1.105 to M1.109. The overview of the thresholds per class is at size criteria; per class, read on at article 2:395a DCC, article 2:396 DCC and article 2:397 DCC.

How it works at Jaarrekening.io

Jaarrekening.io derives the size class from the figures of two balance sheet dates and applies the rule of paragraph 1 in the first and second financial year. For financial year 2023 you record whether you choose the raised amounts. If the general meeting has decided not to apply the exemptions, you record the heavier regime with the date of the decision. A lighter class than the figures give is not possible.

Sources

Legal notice: this information is general in nature and does not replace tax or legal advice or an audit. The substantive correctness and completeness of the annual accounts remain the responsibility of the board.

Frequently asked questions

Which size class applies in my first financial year?