Most restaurant owners drastically overestimate what they'll pocket from selling their business. You see that €400,000 sale price and start planning, but the reality hits hard when taxes and fees slice away nearly half. The gap between sale price and actual net proceeds can be shocking.
What is net proceeds from a sale?
Net proceeds is what actually lands in your bank account after selling. It's your sale price minus every cost and tax you owe.
💡 Example:
You sell your restaurant for €400,000. You expect €400,000, but:
- Tax on profit: €45,000
- Broker and notary: €15,000
- Remaining mortgage debt: €180,000
Net proceeds: €160,000
What taxes do you pay when selling?
Selling your hospitality business triggers various taxes. The amount depends on ownership duration and how you originally acquired it.
Income tax on business profit
Sell for more than book value? That's taxable profit under regular income tax.
- Rate 2024: 36.93% up to €75,518, then 49.50%
- Calculation: Sale price minus book value = taxable profit
- Note: Previous depreciation can resurface as taxable profit
⚠️ Attention:
Your business's book value might be far lower than what you paid due to depreciation. This inflates your taxable profit beyond expectations.
Rollover provision for reinvestment
Here's some relief: buy another business within three years and you might use the rollover provision. You don't pay tax immediately - it transfers to your new venture.
- New business must be purchased within 3 years
- Must also be a business (not a private residence)
- Tax is rolled over, not forgiven
Other costs when selling
Beyond taxes, selling involves additional costs. After managing kitchen operations for nearly a decade, I've seen owners blindsided by these expenses.
💡 Example costs:
- Broker: 3-5% of sale price
- Notary: €2,000 - €5,000
- Accountant (tax advice): €1,500 - €3,000
- Due diligence investigation: €2,000 - €8,000
Remaining mortgage and loan debt
Don't overlook loan payoffs required at sale. These come straight out of your proceeds before you see a penny.
- Mortgage on the property (if you own it)
- Business loans
- Credit facilities
- Possible early repayment penalty interest
Calculate your net proceeds
Use this formula to determine what you actually keep:
Net proceeds = Sale price - Taxes - Sale costs - Remaining debt
💡 Complete example:
Restaurant sold for €500,000:
- Sale price: €500,000
- Book value of business: €200,000
- Taxable profit: €300,000
- Tax (49.50%): €148,500
- Broker (4%): €20,000
- Notary and advice: €4,000
- Remaining mortgage debt: €180,000
Net proceeds: €147,500
Tips to keep more net proceeds
Legal strategies exist to reduce your tax burden and maximize net proceeds from the sale.
- Plan ahead: Start tax planning at least a year before selling
- Rollover provision: Consider reinvesting in a new business
- Timing: Possibly spread the sale over multiple years
- Deduct costs: All sale costs are deductible from the profit
⚠️ Attention:
Tax rules can be complex and change regularly. Always consult a specialized accountant for tailored advice.
How do you calculate net proceeds? (step by step)
Determine the book value of your business
Look up the current book value in your records. This is what you paid minus all depreciation from the past years. Ask your accountant for help if you can't find this.
Calculate the taxable profit
Subtract the book value from your sale price. This difference is your taxable profit. Note: previously depreciated goodwill can also come back as taxable profit.
Calculate tax on the profit
Apply the income tax rate to your profit. In 2024 this is 36.93% up to €75,518 and 49.50% above that. For the exact amount, it's best to consult an accountant.
Add up all sale costs
Broker, notary, accountant, due diligence - add up all costs you incur for the sale. These are deductible from your taxable profit.
Calculate your net proceeds
Sale price minus taxes minus sale costs minus remaining debt = your net proceeds. This is what you actually keep from the sale.
✨ Pro tip
Get your business valuation done 18 months before listing it for sale. This gives you time to address any issues that could reduce your net proceeds and optimize your tax position.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Can I defer tax when selling my hospitality business?
Yes, with the rollover provision you can defer tax if you reinvest in a new business within 3 years. The tax is then rolled over to the new business, not forgiven.
How much tax do I pay on the sale profit?
In 2024 you pay 36.93% income tax on profit up to €75,518 and 49.50% on the amount above that. The exact amount depends on your total income that year.
What if my business is worth less than the book value?
Then you make a loss that you can deduct from your other income. This can even result in a tax refund, depending on your situation.
Do I have to pay VAT on the sale of my business?
Usually not. The sale of a business as a whole is often exempt from VAT. But if you sell only inventory or parts, VAT may be due.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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