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Deductible items for entrepreneurs
1. Entrepreneurs deduction
One of the most used deductible items for entrepreneurs is the entrepreneurs deduction. This is an amount entrepreneurs may deduct from their profit. The deductible consists of the self-employed deduction, start-up deduction, deduction for research and development activities, co-operating partner deduction, and liquidation deduction together.
The self-employed deduction is a deductible item on your income as a self-employed professional. If you meet the conditions, you may deduct a fixed amount annually. In 2023, this is an amount of € 5,030. The Dutch government will gradually reduce the self-employed deduction to 900 euros in 2027 in the coming years.
The start-up deduction is a deduction on top of the self-employed deduction. As a starter, you can deduct an additional amount of € 2,123 from your profit three times in the first five years. To be eligible for the start-up deduction, you must meet three additional conditions.
First, you must be eligible for the self-employed deduction. In addition, you did not use the self-employed deduction more than twice in the five years for the relevant tax year. The last condition is that you were not an entrepreneur for at least one year during the same period.
2. Small Business Profit Exemption
In general, the rule is that you have to invest 1,225 hours per year to be eligible for the deductions. However, this does not apply to the Small Business Profit Exemption, as long as you meet the 700 hours to be seen as an entrepreneur. For 2023, this exemption has been set at 14% of the profit, after you have reduced it by the entrepreneurs deduction.
3. Investment deduction
When you start your business, you also have to invest. You can think of small investments such as a laptop and printer, or a larger investment such as a company car. To a certain extent, the tax authorities take into account that you have to invest in your own company.
Small-scale investment allowance
Minimum amount: € 450
To be eligible for the small-scale investment deduction (KIA) in 2023, you must invest an amount between € 2,601 and € 353,973. The amount that you can deduct annually depends on the amount invested in that specific year. You can find the exact amounts on the website of the Dutch tax office.
Environmental investment deduction
Minimum amount: € 2,500
If you want to claim the environmental investment deduction, you must invest in the so-called environmental investments determined by the Ministry of Infrastructure and Water Management and the Ministry of Finance. Here, it is important to know that you cannot claim the energy investment deduction for the same resources if you opt for the environmental investment deduction.
Energy investment deduction
Minimum amount: € 2,500
If you want to claim the energy investment deduction, you must invest in the so-called energy investments determined by the Ministry of Economic Affairs and Climate Policy and the Ministry of Finance. Also here applies: you cannot claim the environmental investment deduction for the same resources if you opt for the energy investment deduction.
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