Non-commercially viable guarantee

The provision of assets by a significant interest holder to his private company (bv) falls under the product from other activities in Box 1 of income taxation. Having a claim on the bv is a form of provision of assets. This also applies to recourse against the significant interest holder, which arose when they stood as guarantor for one of the bv’s debts. The obligation to make a payment to a creditor of the bv comes about upon entering into the guarantee and, from that moment, pertains to assets from activities. The difference between the paying of a creditor of the bv and the value of the recourse against the bv is offset against the product of the activities. This is not the case, however, if the guarantee is not commercially-viable.

Regarding the question whether the guarantee is commercially viable or not, it must first be examined if reimbursement, that is not dependent on the profit of the bv, can be fixed, against which an independent third-party would have been willing to stand guarantor.

According to the Court of Arnhem-Leeuwarden it is not important, when considering the commerciality of the guarantee, that the loan to which the guarantee relates has been supplied by a third party. When assessing the commerciality of the guarantee, the court did not take into account the fact that the person providing funds was willing to provide more finance because there was little chance of paying back the earlier loan without it. The court did not find it plausible that an independent third-party, given the negative personal capital and the negative results of the bv, would – for whatever fixed reimbursement – be willing, to stand guarantor without any certainty whatsoever.

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