Tax tips for freelancers: which ones apply to you

Which tax tips for freelancers actually apply to you?

Hardly any of them apply to everyone. Each scheme below depends on a different condition.

That is why a list of standard tips misleads you. Read by condition, it takes one pass.

There is no worked example, because on this page the example is you. We leave the amounts of the deductions out on purpose too, because they change every year. Each one already has a page that keeps it up to date. Two cases fall outside this sorting. One is arriving in the Netherlands partway through a year, which changes which schemes you can claim. The other is having clients or income abroad. Check both before you rely on this list. Read how a part year affects the hours criterion. For clients or income abroad, talk to us first.

How do you shorten the list of schemes?

Sort the schemes by their condition and the list gets short. There are five conditions in total. Most of them you can settle in a minute.

The first is hours. At least 1,225 hours in the calendar year¹. On top of that you must spend more time on your business than on other work¹. That second requirement falls away if you were not an entrepreneur in one of the five preceding years¹. Hours decide most of the ondernemersaftrek², the category that includes the self-employed deduction. The starter deduction belongs to it too.

The second is whether you count as an entrepreneur for income tax. That is a judgement about independence, capital, clients and whether profit is realistic⁸. Your registration with the Dutch Chamber of Commerce (KVK) does not settle it⁸. When you count as an entrepreneur explains the test step by step. One question comes before the rest. If the work looks like a job, check false self-employment first. It decides whether you count as self-employed for tax at all.

The third is the business reason behind a cost. A cost reduces your profit when it serves the business. The amount is not the test⁴. Which business costs are deductible sets that boundary. Limited deductible business costs covers food, entertainment and seminars, where only part of the cost is deductible.

The fourth is what you spend on equipment in a year. The investment deduction depends on a table that changes every year. It ignores anything under €450 per asset⁵. Depreciation and the investment deduction sets out that table.

The fifth is turnover. It belongs to VAT rather than income tax. At most €20,000 in a calendar year, both in the year you join and in the one before it⁶. The small business scheme helps you decide whether it pays off.

Which tax tips for freelancers still work without the hours criterion?

All of them except one category. The investment deduction⁵ and the small business scheme⁶ ask nothing about your hours.

What falls away is most of the ondernemersaftrek², the self-employed deduction included. This is the part people get wrong.

The hours criterion page sets out the full test. It covers which hours count, how you make them plausible and what a part year does to the number. If you are anywhere near the line, read that page rather than this one.

Which two of these tips work against each other?

The small business scheme and the investment deduction pull in opposite directions. Inside the scheme you charge no VAT. You also deduct no VAT on your costs and your investments⁷. So equipment no longer costs you the price before VAT. It costs you the invoice in full, because there is nothing left to reclaim.

The investment deduction itself does not change, because it belongs to income tax, not VAT⁵. The two schemes simply apply to different taxes. Nobody nets them out for you. In a year you plan to buy equipment, that is the sum to do before you join the scheme rather than after.

Two smaller interactions are worth knowing. The first comes when your profit is too low to use all of your self-employed deduction. The deduction page explains what happens to that unused part. There is also one case where the profit exemption turns against you: in a loss-making year it shrinks the loss, so it lowers your relief rather than raising it³.

The pattern is the same every time. Each page explains its own scheme correctly. Nobody but you is looking at two of them at once. That gap is the one thing no single page can close for you.

What to do with your own list

Check the six schemes and the gate once and most of them settle themselves. Two need a number you already have. The rest are worth an afternoon a year.

Some topics belong next to this list rather than in it. If you are filing rather than planning, the self-employed tax return covers the whole return. Income tax for the self-employed walks you through the calculation from profit to what is left. In your first year, starting a business puts these same decisions in the order they arrive.

Timing is a separate question. The schemes that close on 31 December are on end of year tax tips, which is written for that moment. Pension falls outside this list too. The fiscal retirement reserve covers a reserve you may still be carrying.

This stops being a list at two points. The first is where two schemes meet. The second is where the answer would have changed what you invoiced. That part is a conversation rather than a page.

What we do for business owners is on our page about tax advice for entrepreneurs.