Limited deductible business costs: threshold or 80%?

What are limited deductible business costs?

Some business costs count only partly against your profit. The Belastingdienst calls these limited deductible business costs¹. Advisors also call them gemengde kosten (mixed expenses), because they carry a private edge too.

Two groups fall inside the limit². The first is food, drink and stimulants: a client lunch, the coffee you serve, a box of cigars. The second is representation, congresses, seminars and study trips, with the travel and accommodation around them.

Nothing outside those two groups falls under the limit. And what you eat or drink yourself is not deductible at all, not even partly.

Idris runs a one-person business as a software architect in Rotterdam. He takes clients to lunch, goes to one congress a year and throws a reception for his network. Every figure below is his. Start with the six points that decide your route.

Which mixed expenses fall inside the limit?

The limit covers exactly two groups of costs. Most other costs are either fully deductible or not deductible at all.

The first group is food, drink and stimulants². A business gift of any of them counts here too. A client lunch or dinner counts, tip included. So do coffee, tea, milk and soft drinks. Cigarettes and cigars count as stimulants.

The second group is representation, congresses, seminars and study trips². Receptions belong here and so do promotional gifts. The travel and accommodation you book around a congress or a study trip come with it. A €1,500 cap applies to that travel and accommodation.

The costs just outside the two groups matter as much. Advertising is a business expense in full, even though it can look like representation. Professional literature is fully deductible. General literature is not deductible at all. Work clothing counts in full when it is a uniform or carries a business logo of at least 70 cm².

Two boundaries are worth marking. A congress or a study trip belongs in the second group. A course to learn something new does not. The rule for study costs sits on its own page. A private car driven for the business is a different rule again at €0.25 per kilometre in 2026³. Larger purchases follow the depreciation rules for business assets.

Your broader question may be which cost is deductible and how much of it. The general answer sits on what business costs are deductible. This page picks up where that one stops. The table sets the two groups and their neighbours side by side.

Threshold or 80%: which route should you choose?

Take the percentage route while your limited deductible business costs stay under €28,500. Above that figure the threshold route deducts more.

The two routes work differently. On the threshold route the first €5,700 of these costs drops out and you deduct the rest¹. On the percentage route you skip the threshold and deduct 80% of the whole amount¹. The same 80% applies to income from other activities, not only to profit from a business².

The tipping point is arithmetic, not policy. The threshold route gives you the total minus €5,700. The percentage route gives you 0.8 times the total. Those two are equal when 0.2 times the total is €5,700, which puts the total at €28,500. Run it on your own figure and you get the same answer.

One thing the Belastingdienst does not spell out is how far the choice reaches. Its wording says you may choose the percentage instead of the threshold. It does not say whether both groups share one €5,700 threshold. Nor does it say whether each group carries its own. That point is open, so bring it to your advisor with your own totals before you file.

If your costs sit near €28,500, the difference between the two routes is small and the choice barely matters. Further away from it the gap widens fast. Working out which side of €28,500 you are on takes one afternoon or one conversation.

What does the choice look like on real figures?

Idris ends up €4,080 better off on the percentage route. His limited deductible business costs come to €8,100 for the year, which sits well under the tipping point.

He spent €2,100 on client lunches and dinners and €1,900 on a congress fee. The travel and accommodation for that congress cost €2,200. A reception for his network cost €2,600. The €1,500 cap applies to the travel and accommodation, so €700 drops out before he picks a route. That leaves €8,100 inside the limit.

The threshold route takes €5,700 off that and leaves him €2,400 to deduct. The 80% route gives him €6,480. He elects the percentage and the difference is €4,080 of extra deduction.

The example works with one combined total, because the scoping question above stays open. If the two groups turn out to carry separate thresholds, the arithmetic changes and the percentage route wins by more.

The table below sets out each step, with our advisor’s take right after.

How does this work in a bv?

A bv deducts 73.5% of these costs, not 80%. The threshold route exists there too and the threshold itself can be higher than €5,700.

Take Idris again. If he ran the same business through a bv, he multiplies €8,100 by 73.5%. That gives about €5,954 on the percentage route¹. The threshold route would still take €5,700 off and leave €2,400. The percentage route wins there as well, though by a smaller margin.

The threshold in a bv is not a flat number. It is €5,700 or 0.4% of the combined taxable wages of everyone on the payroll if that comes out higher.¹ A bv with one director on a modest salary stays on the €5,700 floor. A bv with staff can sit well above it.

A higher floor moves the tipping point up with it. On the €5,700 floor the two routes meet at about €21,509 of these costs. With a higher wage-based floor, divide that floor by 0.265 and you have your own figure.

One exception is worth knowing. Where a cost counts as taxable wage for the employee, you deduct it in full. The limit does not touch it.

Have your advisor confirm the threshold against your own payroll before you file. The table below sets out the bv rules, with the 2026 change underneath it.

What does this mean for your own books?

Keep these costs on their own ledger line and the choice makes itself. You cannot pick a route on figures you have not separated.

Three things are worth doing before you file. Apply the €1,500 cap to travel and accommodation first. Then add up everything that falls in the two groups for the year. Run both routes and take the higher deduction.

Two questions here need your own figures and a second pair of eyes. Whether the two groups share one threshold is the first. Whether your congress travel was necessary for your work is the second. Neither is a number you can look up and both change what you may deduct.

Cost deduction is only the first layer of the calculation. The self-employed deduction comes after it, once your profit stands. We handle the whole self-employed tax return as well, from the cost ledger to the filing. An advisor works through both questions on your own figures. Idris ran both routes once and the €4,080 followed from his own ledger.