Dutch end of year tip #1

Dutch hours criterion for self-employed in 2022

We are in the last quarter of 2022: as an entrepreneur in the Netherlands, it is time to organize your tax affairs as optimally as possible before the end of the year. It is important to ensure that you meet the hours criterion. To be considered an entrepreneur for income tax purposes, you must put in at least 700 hours per year in your company. But do you want to take advantage of all the tax benefits for self-employed professionals? Then you must meet the hours criterion of 1,225 hours!

Please note: there are more conditions that you must meet to be seen as an entrepreneur for income tax purposes. Do the entrepreneur check if you are not sure.

Conditions hours criterion

In most cases, the following two criteria apply:

  • You spend at least 1,225 hours per year on your company;
  • you spend more time in your company than other activities (such as salaried employment).

This second condition lapses if you were not an entrepreneur in at least one of the five preceding years.

hour criterion self employed

Entrepreneurial deduction? Meet the hours criterion!

If you are still in doubt about whether you will meet the hours criterion in 2022, make sure you put some extra time into your company. As soon as you meet the hours criterion of 1,225 hours, you can make use of the entrepreneur’s deduction. The deduction is a collective name for various deductible items that lower your taxable profit (and therefore tax to be paid):

  • self-employed deduction;
  • starter’s allowance;
  • deduction for research and development work;
  • cooperation deduction;
  • discontinuation deduction.

This is how you meet the hours criterion in 2022

The first step is to keep a good time administration. As an entrepreneur, you are also obliged to do this. In some cases, the Dutch tax authorities check whether you have actually met the hours criterion, in which case you must provide proof.

Rest assured: all hours you spend to keep your business running can count towards the hours criterion. So the time you spend on administration, website maintenance, customer contact, travel, etc. And, of course, not to forget the direct hours you work for your client.

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Are you a Dutch entrepreneur and could you use some help with your administration, VAT return, and income tax return? We are happy to help! Please contact us using the details mentioned below.

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