Starting a business after retirement

On 1 July 2024, 213,300 entrepreneurs over the age of 65 were registered in the KVK Business Register. 

Are you an entrepreneur?

Are you just doing another assignment for your former employer? Or are you doing a project for a single client? Then you are not an entrepreneur. This means that you do not have to register with KVK.
If your employment is not extended for that one assignment, your employer or client can hire you through a temporary employment agency. Another possibility is using the opting-in scheme (in Dutch). This arrangement means it appears as if you are employed and your client deducts payroll tax and premiums from your salary and transfers it to the Tax Administration. 

If your client does not want to withold taxes, then using the data portal Payments to third parties (uitbetaalde bedragen aan derden, UBD, in Dutch) is another option. Your client then registers their payment to you with the Netherlands Tax Administration (Belastingdienst), but you are not considered a salaried employee, nor an entrepreneur. At the end of the year, you file a tax return for this income yourself.

Tip! In some situations, it is hard to tell the difference between an entrepreneur and an employee. So, check with the Tax Administration to see if the schemes described above apply to you. 

Your old age pension (AOW) and income

Everyone who has lived or worked in the Netherlands accrues a basic state pension, the AOW. You will receive your AOW benefit when you reach the AOW age threshold. How high the benefit is will vary depending on your situation. You may earn an unlimited amount on top of your AOW benefit. The amount you earn with your business will not affect the level of your AOW.

If you had a job with an employer (salaried employment), you probably also built up extra pension. You will receive this pension from your retirement age. This retirement age may differ from the AOW age. There is no additional earning limit for your pension benefit either.

Income tax and additional earnings

If you start as a self-employed professional without staff (zzp’er) or a freelancer, your business structure is likely to be a sole proprietorship (eenmanszaak). This means you must pay income tax on your business profits. The Tax Administration considers these profits as extra income on top of your AOW and pension. You must declare this income when you file your income tax return at the end of the year. The Tax Administration calls this income from other activities (inkomsten uit overig werk, in Dutch). Your extra earnings can put you in a higher tax bracket. This means you will have to pay more tax.

When you reach retirement age, the income tax rate decreases because you no longer pay the AOW premium. The tax credits also change. Do you receive rent or healthcare allowance? Your additional income may mean you receive less or no allowance. 

Tax deductions for entrepreneurs

Do you do more than an occasional job? Then the Tax Administration may see you as an entrepreneur. You can check this with the Tax Administration's tool (in Dutch). 

Do you spend at least 1,225 hours on your business? Then you can make use of schemes for entrepreneurs such as the private business ownership allowance (zelfstandigenaftrek). You may only deduct half the amounts after you reach retirement age. 

VAT and the small businesses scheme (KOR)

You will also have to deal with VAT. You calculate what you have charged your customers in VAT per quarter. You deduct the VAT that you have paid yourself on costs or purchases. You file a declaration on this balance. 

Is your turnover lower than €20,000? Then the small businesses scheme (KOR), an exemption from VAT, can be beneficial.

General information for starters

This article covered topics of particular interest to entrepreneurs receiving a pension. As a starting entrepreneur, you also have to deal with the following:

• Choosing a legal structure
• Taxes 
• Registering with KVK
• Business administration and bookkeeping
• Choosing a name
• Renting commercial space
• Hiring staff