Enterpreneur

Business owners in the Netherlands may be eligible for the entrepreneur allowance (ondernemersaftrek). Deducted from profit so that the entrepreneur pays less tax, the entrepreneur allowance consists of:

  • private business ownership allowance
  • tax relief for new companies (increased private business ownership allowance)
  • working partner’s abatement
  • R&D tax credit (WBSO)
  • discontinuation relief
  • tax relief for new companies in the event of incapacity for work

The maximum rate for the entrepreneur allowance is 40% in 2022, 43% in 2021 and 46% in 2020.

When do you qualify?

You must be considered an entrepreneur for income tax purposes and make profit from your business activities. You must also meet the time criterion for most parts of the entrepreneur allowance. This means that:

  • you must work for your own company for at least 1,225 hours. In case of a long-term occupational disability this time criterion changes to only 800 hours
  • you must spend more than 50% of your working time working for your own company. This requirement does not apply if you have not been an entrepreneur in the last 5 years

How to apply?

The entrepreneur allowance is an integral part of your tax return. You file it in when submitting your income tax return.

You can register as an entrepreneur if you meet the requirements of the Netherlands Chamber of Commerce (KVK). The Dutch Tax and Customs Administration (Belastingdienst) also checks if you are an entrepreneur for VAT and/or income tax purposes. Learn more about what information KVK and the Dutch Tax and Customs Administration consider. And discover what this means for your situation.

On this page

  • When does KVK see you as an entrepreneur?
  • When are you an entrepreneur for VAT purposes?
  • When are you an entrepreneur for income tax purposes?
  • Check if you are eligible for deductions and allowances
  • Not an entrepreneur, but enjoying results
  • Are you self-employed? Avoid false self-employment

When does KVK see you as an entrepreneur?

KVK uses 3 main criteria to decide if you are an entrepreneur:

  • You supply goods and/or services.
  • You charge more than a nominal/symbolic fee for this. You earn money from it.
  • You regularly do business with other people, not just friends and family. You also compete with other entrepreneurs who provide the same or similar services or products.

Please note: The Dutch Tax and Customs Administration uses different conditions to decide if you are an entrepreneur. Therefore, it is also good to ask yourself these 4 questions:

  • Will you invest money and/or time to start or grow your business?
  • Is it a one-off job or will you regularly work on your own business?
  • Will you work for more than one client?
  • Do you decide when and how you do your work?

Your answers will help you decide if you should register your business with KVK.

KVK Advice Team

Is your answer to one or more questions ‘no’? Or are you unsure about your situation? Get in touch with the KVK Advice Team by calling 0800 2117.

When are you an entrepreneur for VAT purposes?

When you register your business with KVK, your details will be passed on to the Dutch Tax and Customs Administration. To assess if you are an entrepreneur for turnover tax (VAT) purposes, the Dutch Tax and Customs Administration considers the following points:

  • Do you practice a profession or run a business independently?
  • Do you have regular income?
  • Do you have income in addition to your permanent job?
  • Are you trying to earn money from an entitlement or assets, such as savings, investments, or a house or holiday home?

Are you an entrepreneur for VAT purposes? Then you are not automatically an entrepreneur for income tax. This is because the Dutch Tax and Customs Administration considers different conditions for income tax purposes.

Are you eligible for the Small Businesses Scheme (KOR)?

Is your business registered in the Netherlands? And is your annual turnover less than €20,000? Then you can participate in the small businesses scheme (KOR). If you do so, you do not charge VAT to your customers. This simplifies your administration. Learn more about using the small business scheme.

When are you an entrepreneur for income tax purposes?

You may be an entrepreneur for income tax purposes if you provide products or services in exchange for payment. And if you expect to make a profit. Do you only do business with family or friends? Or as a hobby? Then you are not an entrepreneur for income tax purposes.

The Dutch Tax and Customs Administration decides if your income is ‘profit from business activities’. If yes, you are an entrepreneur.

The criteria to determine this are, for instance:

  • Independence
    Are you in charge of how you arrange your work? Do you determine your prices? Do you use your own materials, tools, or equipment?
  • Business risk
    Are you liable for your business debts? Do you run a financial risk if your business does not go well?
  • Continuity
    Do you invest time and money to find new customers? Do you have enough funds to run your business for some time?
  • Business size
    Do you have multiple clients? What is your average yearly turnover?

Try the online tool

Your circumstances determine if you are an entrepreneur for income tax. The Dutch Tax and Customs Administration has devised an online tool (in Dutch) to help you find out if you are likely to be assessed as an entrepreneur or not: the OndernemersCheck. If in doubt, contact a service provider, or check with the Dutch Tax and Customs Administration.

Check if you are eligible for deductions and allowances

If you are an entrepreneur for income tax purposes, you can make use of special schemes. For instance: the entrepreneur allowance, the SME profit exemption, the private business ownership allowance, and the small projects investment credit (KIA). Be aware that you can only benefit from these schemes if you also meet the time criterion: For periods during the coronavirus pandemic, this criterion was relaxed.

Not an entrepreneur, but enjoying results

Are you not considered an entrepreneur for income tax? But you do have income as a self-employed person? For example, as a delivery courier or for other one-off services. Or if you sometimes do freelance work next to your main job. Then you are said to be ‘enjoying results’. Your income counts as ‘earnings from other activities’.

You cannot claim any of the special tax schemes for entrepreneurs for income tax. However, you are allowed to deduct the costs you incur for your activities from your profit. And you may still be an entrepreneur for VAT purposes.

Are you self-employed? Avoid false self-employment

If you register as a sole proprietorship, there are rules for how independent you are. According to the Employment Relationships Deregulation Act (wet DBA), the working relationship must be appropriate. For example, does your client determine how you do your work? Or are you paid when you are on holiday or ill? If so, you may actually be in paid employment. This situation is called false self-employment. Learn how you can avoid false self-employment.