Belgian Tax Authorities Issue Positive Ruling Regarding the Slicing Pie Startup Equity Model
Brussels – The Office for Advance Tax Rulings of the Belgian Federal Public Service Finance has reviewed the structure of the Slicing Pie model for the allocation and recovery of equity for early-stage startups and issued a positive ruling for the startup BUFFL, declaring that the implementation of the Slicing Pie model does not entail any adverse tax effects in the context of BUFFL. The Slicing Pie model allows startup founders to create a perfectly fair equity split among early contributors based on each person’s contribution. The model differs from traditional approaches because contributions change over time, so the final equity distribution is unknown at the outset of the venture. “As an entrepreneur I immediately saw the benefits of the Slicing Pie model, as it adapts your equity structure in a fair way to all unforeseeable circumstances in your startup journey. Even though the Slicing Pie model is much more logical and fairer than traditional methods, we were concerned that the non-traditional approach would trigger unnecessary tax consequences, “said BUFFL co-founder Seppe Stroo. “The positive fiscal ruling means we can be confident that we will not run into problems.”
Mike Moyer, the US-based inventor of the Slicing Pie model, was pleased that BUFFL received a favorable ruling, “Slicing Pie is used by thousands of companies all over the world and most countries encourage fairness, but it is always nice to verify that the model will not conflict with local tax customs. Everyone in a startup company deserves their fair share of the company’s success, including the government!”
“Founders often split up all the equity in fixed amounts during the formation of a startup,” said Thomas Daenen, founding partner at Beyond Law Firm which has become specialized in the Slicing Pie model, “the problem is that startup teams change or an individual’s commitment level changes. Such changes lead to disputes over equity splits that can be very detrimental and expensive to early-stage companies. The Slicing Pie model is designed to accommodate changes and adjust to keep things fair. It is an essential tool for startup founders.”
“Even though this decision of the Belgian Office for Advance Tax Rulings is only effective with regards to the specific situation of Buffl and cannot be regarded as a general rule, this decision confirms our position that, under specific circumstances, the Slicing Pie model may be implemented without any adverse tax consequences for the shareholders.” explains tax lawyer Clément Pirenne of Beyond Law Firm.
About Beyond Law Firm
Beyond Law Firm advises entrepreneurs and investors on how to incorporate and organize their companies and focus in particular on optimizing the set-up of innovative businesses. Their corporate team counsels clients in relation to corporate operations and questions pertaining to corporate governance, directors’ liability, etc.
With a very strong expertise in complex operations involving several jurisdictions, they represent a diverse range of domestic and international companies, VC’s and business angels in M&A in addition to private equity and (re)structuring operations.
Beyond Law Firm also has a team with extensive experience in all legal aspects related to IP, ICT, Data Protection and Privacy.
BUFFL is an agile market research company that puts companies in live connection with their target audience. BUFFL provides validation in the palm of your hand and allows innovators and marketeers to validate their assumptions in just 30 min. Using its own research platform BUFFL developed a structured innovation methodology to validate business ideas in one week.
For more information, contact Seppe Stroo or visit www.landing.buffl.be.
About Slicing Pie
Slicing Pie is a universal, one-size-fits-all solution for the allocation and recovery of equity in an early-stage, bootstrapped company. It is a formula that allows founders to divide equity based on the fair market value of each participant’s contribution. It is a fair, logical and structured way to align everyone’s interests and incentives. Slicing Pie is used all over the world. It is, by far, the fairest way to split equity in an early-stage, bootstrapped startup!