Reduce your taxes through deductibles

If you own an eenmanszaak (sole proprietorship), vennootschap onder firma/vof (general partnership), or commanditaire vennootschap/CV (limited partnership), you can use the entrepreneur allowance and the SME profit exemption. The other schemes apply both to businesses which pay income tax and to businesses that are a besloten vennootschap (private limited company) that pays corporate income tax. If you are uncertain if you are eligible for any of these schemes, consult an adviser. 

Things to consider:

• If anything has changed in your personal situation, you should check the pre-completed tax return and complete this where necessary. Pay attention to the following issues: 

• If you filed a loss last year, you may be eligible for a tax refund. The Netherlands Tax Administration deduct (in Dutch) your loss from your profits for the 3 previous years, starting with the oldest year. 

• Averaging (in Dutch) may save you money. If you made less money during one year than in the two previous years, you can calculate the average income for those 3 years. If the taxes for the average income are lower than in the separate years and the difference exceeds €545, you may be eligible for a tax refund. The averaging scheme will be discontinued. The last period for which you can request averaging is 2022 through 2024. 

Income Tax Return checklist 

Submit your income tax return flexibly and efficiently. You will be ready for your tax return after conducting 6 checks. 

Using the entrepreneur allowance 

Check whether you are eligible for the entrepreneur allowance. This is an amount you deduct from a lower amount in taxes. The entrepreneur allowance may consist of: 

• Private business ownership allowance: annual deduction of a fixed amount 

• Working partner's abatement: deduction for unpaid co-working performed by tax partner 

• Tax relief for new companies: additional deduction of a fixed amount in 3 of the first 5 years of the business 

• Tax relief for new companies in case of occupational disability: fixed amount for reduced hours criterion 

• Discontinuation relief: deduction of a fixed amount if you are disbanding your business 

• R&D tax credit (WBSO): deduction for investigative and developmental work in innovation 

To be eligible for the deduction for businesses, you must be considered a business for the purpose of income tax. Use the Ondernemerscheck (Belastingdienst, in Dutch) to check this. You have to meet the hours criterion of 1,225 hours per year. 

SME profit exemption  

Thanks to to the SME profit exemption, 13.31% of your profit is exempt from income tax in 2024. You must first subtract the deduction for businesses from your profit. As the owner of an SME or an independent contractor, you will be automatically eligible for the profit exemption for SMEs for your income tax and tax returns. 

Deducting business expenses 

You are permitted to deduct the expenses you incur for your business as business expenses or professional expenses. There are some expenses you are permitted to deduct over the course of one year, including rent. In some cases, you will need to spread them out over several years, such as the purchase costs of a car. If you incur expenses that qualify as both business and personal expenses, you are only permitted to deduct the business portion of your expenses. Often, you will be able to deduct the VAT you pay on your business expenses in your VAT return.  

Applying deductions 

If you invest in business assets (for example, new computers or machines) that you will be using for longer than one year and the amount is higher than €450 per business asset, you must divide the expenses related to the investment over the number of years in which you use the business asset. During your first 5 years as a business owner, you are eligible for the scheme for random deduction. If you meet the terms and conditions, you can determine when, and how, you depreciate. 

In 2023, there was a one-off 'at random depreciation' scheme. On business assets covered by this scheme, you may depreciate up to 50% at random in 2023. On the remainder you apply normal depreciation.

Tax-friendly investments 

Some investments qualify as tax-friendly because they are tax-deductible. Please note: these schemes only apply if you are a business owner for the purpose of paying income tax, or if your bv or nv qualifies as a business for the purpose of corporate tax. 

• Small projects investment allowance (KIA): use this if you invest a minimum of €2,800 during any financial year and a minimum of €450 per business asset. 

• Energy investment allowance (EIA): this applies if you buy energy-efficient business assets. 

• Environmental investment allowance (MIA): use this if you are buying environmentally friendly business assets. 

• Random depreciation of environmental investments (Vamil): this allows you to choose yourself how to write off environmentally friendly business assets. You are permitted to combine the MIA and VAMIlL schemes. The Milieulijst (environmental list) contains a list of business assets classified under the MIA and Vamil. 

Small Businesses Scheme (KOR) for VAT 

You can opt for the Small Businesses Scheme (KOR) if your revenue is below €20,000 per calendar year. If you participate in this scheme, you will not be required to charge VAT to your clients or customers. This means you will also not pay any VAT to the Tax Administration. This is offset by the fact that you cannot deduct VAT on business expenses and investments. With a few exceptions, you will no longer be required to file a VAT return. Whether this is worth your while depends on your specific business situation.  

Checklist 

View the Small Business Scheme checklist video (YouTube, English subtitles available), which explains the scheme in seven steps. 

Applying the margin scheme 

If you trade in used goods, you may be eligible to apply the margin scheme. This scheme applies to the majority of used goods you bought without VAT, as well as to art, antiques, or collector’s items. You will not charge VAT on your revenue, but rather on the difference between the sales price and the purchase price of the goods: the profit margin. If you sell at a profit, your profit margin will be positive, and you will be required to pay VAT. If you are selling at a loss, this means you have a negative profit margin. In this case, you will not be required to pay VAT, but will also not receive any VAT. 

Deducting expenses associated with commercial space 

The tax deductibles for which you are eligible depend on your business premises. For the tax authorities, it makes a difference whether you are working in a building you are hiring or have purchased, or if you are using a section of your private home as a workspace. 

Renting commercial space 

If you are renting commercial space, you are entitled to deduct all costs in your income tax return which you incur for these commercial spaces. If you deduct the VAT from these expenses in your VAT return, you must report the expenses, exclusive of VAT, in your income tax return. If you are not deducting VAT in your VAT return, you should state the expenses, including VAT, in your income tax return. 

Commercial space qualifies as property 

If you own the commercial space you are using, you must decide, for income tax purposes, whether the building qualifies as business capital or private capital. If you use your own building entirely for your business, you must include the building in your business assets. The choice of whether the commercial space is included in your personal assets or business assets (Belastingdienst, in Dutch) determines which expenses you can deduct from your income tax return. 

Buying a business premises 

If you intend to buy a commercial space, this qualifies as an investment. You may be entitled to an investment deduction. Discover financing for your business premises. 

Commercial premises in your home 

You live and work in the same building. You can use the (Dutch only) Belastingdienst calculation tool  to see if you can deduct the expenses related to your home workspace. 

Deducting car-related expenses 

If you need a car for work, you can either get a company car or use your personal vehicle for business purposes. Business mileage has an impact on income tax and VAT. Find out how it works.  

Assistance in filing your taxes 

A bookkeeper, administrative expert or tax expert (NOAB, in Dutch), an accountant through NBA or SRA or a tax adviser (in Dutch) will be able to assist you.