Optimise your management company

Tuesday, January 19, 2021

3 minute read

As part of our tax technology offering, Aeco publicly opens its Tax API. The Tax API can be used to make various calculations and optimisations based on tax legislation. In this blogpost, we cover the optimisation of a Belgian management company (manco). The Tax API is part of the tax technology offering developed by Aeco to provide programatic access to tax legislation. With this Tax API, we aim to disrupt the way companies, governments and universities interact with tax regulations.

When to use

This route enables you to perform an optimisation of a management company or manco.

A common questions for Belgian one man businesses is whether they should start a manco. This route will determine for a self employed person who currently owns a one man business, whether it is financially interesting to start a manco

When a one man business makes the transition to a manco, he or she will then be the only shareholder and the company director. This transition leads to a number of benefits. One of the benefits is a more beneficial tax regime.

One of the drawbacks is that, for people with a relative low income, cash flow can become a problem. The tax benefits in a manco primarily arise from the fact that you are able to distribute dividends at a low tax rate. These are usually distributed at the end of the year and not necessarily every year which can lead to a lower cashflow.

Example: An example of an application that works on this route can be found here (dutch only).

Tax technology - Management company optimisation

To determine the benefits of a manco, we make a comparison between the current regime without manco and the potential regime with manco. As a starting point, we suggest making the optimisation for a minimum duration of 5 years. Please note that the Tax API allows you to tailor the optimisation to your specific needs. The comparison is done in two steps:

Step 1 : A calculation based on the self-employed basics route (a gross to net calculation) to determine the current net income of the involved self-employed. The yearly net income is multiplied by 5 to obtain the cumulative net income of the self-employed.

Step 2: Our patented optimisation technology makes a decision based on the provided input to create the ideal remuneration policy. The technology will in this case make decisions regarding director salary, dividends and liquidation dividends for each year of the optimisation.

Step 3 The results of step 1 and step 2 are combined into a response. The response will give clear and detailed insights to the self-employed person to make an informed decision on the impact of switching to a manco.

Get started with the tax API

Get started with the Tax API and request a Tax API Key or look at the Tax API documentation.

Tax API Key: In order to use this API you need an API-key. A key can be requested by contacting us at info@aeco.cloud. After you obtained an API key you can start sending requests by including the x-api-key: YOUR_API_KEY into the header of your request.

Tax API Documentation: Are you curious to find out more about the future of tax and tax technology? Then it's your lucky day since the tax API documentation is publicly available.

To see our API in action, have a look at the Quickstart!

TaxTechnology.be is a service by Aeco

Aeco is a family-owned business founded by three brothers with a complementary skill-set.

We are a Legal Tech company transforming the legal industry. We believe that legal services can be performed differently to bring top-quality advice at an affordable price..