Small Business Tax Deduction: Who Qualifies and What You Get
Freelancers in the Netherlands can reduce their taxable profit through this specific deduction, provided they meet certain hourly requirements.
The Small Business Tax Deduction is a way for freelancers to reduce the amount of profit they are taxed on.
Who it's for
This scheme is designed for freelancers (ZZP'ers) who are officially registered with the Chamber of Commerce (KVK).
What you get
You can claim a standard deduction of 13.31% on your taxable profit. This reduces your overall taxable income, meaning you pay less in taxes on your business earnings.
What it costs you
To qualify for this deduction, you must meet the 1,225-hour criterion for entrepreneurship. This means you need to prove you have spent at least 1,225 hours working on your business during the year.
The catch to know
It is important to remember that this deduction is separate from the self-employed deduction (zelfstandigenaftrek). You should treat them as two different parts of your tax calculation.
How to apply
- Track your business hours throughout the year to ensure you meet the required threshold.
- Calculate your total taxable profit for the year.
- Apply the deduction when filing your annual tax return.
- Check the official portal for specific filing instructions and current rates.