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Are there specific tax credits or tax allowances for entrepreneurs?


Question:

Are there specific tax credits or tax allowances for entrepreneurs?

Answer:

If you are self employed and spend more then 1,225 hours per year on your business then you are able to claim the self employed deduction. If you started your business more than 5 years ago you must also spend more than 50% of your working hours on your business. This is relevant for entrepreneurs who also work as an employee besides the business. So in the start period of the business this is not applicable. The amount of the deduction depends on the (net) profit you made with your business. You will find the amounts in the table below. For entrepreneurs older than 65 the amounts must be reduced with 50%.

If you were not self employed within five years before the current year and you didn't use the self employed deduction in more than two years then the self employed deduction will be raised with the startersdeduction.

The SME deduction (Small en Medium Enterprises) is a percentage of the profit and can be claimed irrespective of the hours worked. So if you spent less than 1,225 hours on your business during the calendar year you can still claim the SME deduction, but not the self employed deduction or starters deduction. 


2017

In 2017 the self employed deduction is a fixed amount of € 7,280 (same as 2015 - 2016) but with a maximum of the taxable profit of the business. The deduction therefore can't lead to a loss.

The starters deduction is € 2,123.

The SME deduction (Small en Medium Enterprises) is 14% of the profit after it has been reduced with the self employed deduction and the startersdeduction.

2016

In 2016 the self employed deduction is a fixed amount of € 7,280 (same as 2015) but with a maximum of the taxable profit of the business. The deduction therefore can't lead to a loss.

The starters deduction is € 2,123.

The SME deduction (Small en Medium Enterprises) is 14% of the profit after it has been reduced with the self employed deduction and the startersdeduction.

2015

In 2015 the self employed deduction is a fixed amount of € 7,280 but with a maximum of the taxable profit of the business. The deduction therefore can't lead to a loss.

The starters deduction is € 2,123.

The SME deduction (Small en Medium Enterprises) is 14% of the profit after it has been reduced with the self employed deduction and the startersdeduction.

For previous years see: http://www.expatax.nl/taxnewsselfemployeddeduction

 
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Comments (4)
Comment by Tugrul Temel on Wed, Jan 27th, 2016 at 11:43 AM
I have started my business in 2015 and in the same year I received some amount of money from my previous employer by Court Order. 1) Would it be possible to declare it as business revenue? 2) If not, how should I declare that amount to tax authorizes (note: the amount is a lump-sum payment to me without any tax withholding by the employer) Could you please advice me on how to declare this amount?
Comment by Arjan Enneman on Wed, Jan 27th, 2016 at 12:11 PM
The amount of money you received is linked to your previous employment and is not related to your business. So it can‘t be declared as business revenue. It will have to be declared as income from employment. Strange however is that your previous employer didn‘t withhold any wage tax, which normally has to be done. If you now have to pay tax since the income is declared in your income tax return the tax authorities will charge interest on the amount.
Comment by Peter Newberry on Wed, Mar 29th, 2017 at 12:43 AM
Let us say you begin your self employed business on January 1 2017 ( your employed job ended in November 2016 and you have never been self employed before ) . In 2017 your sales are 50,000 euros and costs 10,000 euros - so you made 40,000 euros profit . So is it right you can then deduct 9,393 euros - leaving a profit of 30,607 euros? What % is this 30,607 euros then taxed at ? (you only say the % is reduced by 14%). Will you also then get the other normal tax deductions (heffingskorting etc ) or are these deductions in place of them? (I am confused by the fact that a zzp in not a BV or an individual!)
Comment by Arjan Enneman on Tue, Sep 26th, 2017 at 2:24 PM
40,000 Euro profit. This is reduced with 9,393 Euro (self employed credit and startersdeduction) leaving 30,607 Euro. This amount is then reduced with the SME exemption of 14% (14% x 30,607) which is 4,285 Euro leaving a taxable income of 26,322 Euro. This income is then taxed based on the standard tax brackets/tax rates taking also the standard tax credits in account like the heffingskorting. For the tax rates see www.expatax.nl/tax-rates.
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