Deducting business expenses

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Netherlands Tax Administration, Belastingdienst
Netherlands Tax Administration, Belastingdienst

Business expenses are the costs your business incurs to generate revenue. Some business expenses can be deducted partially or fully in your income tax return. This way you pay less tax.

You can only deduct the costs that you make for your business. Such as the rental costs for business premises or costs for an internet subscription. These costs are also called business expenses.

There are also costs related to starting a business. These start-up costs are sometimes deductible. For example, costs for registering in the KVK Business Register.

Many business expenses can be deducted at once but business assets must be spread over several years:

Deductions that must be made in 1 year

Costs that you incur in 1 year can be fully deducted in the same year. For example, rental costs. Read more about expenses you can deduct in 1 year (in Dutch).

Deductions that must be spread across multiple years

Sometimes you must spread the deduction over several years, such as when buying a company car. Then you must amortise this investment. To do so, you divide the costs over the years in which you use the asset.

VAT on business expenses

You can usually deduct the VAT you pay on your business expenses in your VAT return. The Netherlands Tax Administration (Belastingdienst) calls this an input tax deduction (aftrek van voorbelasting).

Business location

Do you have business premises? For example, an office, factory, shop, or workshop? Learn more about what costs are deductible for your business premises.

Running a business from your home

Business expenses for a workspace in your home cannot usually be deducted. The Dutch Tax Administration has a tool ('Rekenhulp Werkruimte', in Dutch) to help you calculate what costs you can deduct for a workspace in your home.

Study costs

Study costs that are made to keep up to date with specific knowledge needed for your business can be deducted from your profits. You can also deduct costs for specialist literature. You may not deduct study costs to acquire new knowledge as a business expense.Learn more about the deduction of study costs for work (in Dutch).

Insurance and pension premiums

Insurances you take out for your business are business expenses. For example, a business or professional liability insurance. You can deduct these insurance premiums from your profit. This also applies to pension premiums.

Business gifts and representation costs

Do you spend money to promote or represent your business? For example, business gifts for clients, making a website, business cards, or business lunches. But also participating in business congresses and seminars, including travel costs. These costs can be partially deducted. See the overview below.

Christmas gifts and other extras for staff

You may deduct VAT on gifts and other extras for your staff. For example, if you want to thank your staff with a Christmas or end-of-year gift. However, you must not spend more than €227 (excluding VAT) per employee on gifts and extras in a year. This is the so-called threshold amount (drempelbedrag). Your employee can co-pay for extras they receive (own contribution). You must still count the total costs for the extras towards the threshold amount. Find out how to calculate the expenditure per employee on the Tax Administration website (in Dutch).

Sometimes you do not have to pay payroll tax on gifts or other extras. This may be possible if you still have unused budget from the work-related costs scheme.

Overview of deductible costs

This is a translation of the overview in Dutch of deductible costs the Belastingdienst has published on their website (in Dutch), valid for 2024.

Which costs are deductible in 2023?

  • Workspace at home: 0%, with exceptions. Use the BD tool (in Dutch) to find out if you may deduct the costs for your workspace at home.
  • Business gifts in the form of food and beverages: There is a € 5,600 threshold in 2024. Instead of this threshold, businesses are allowed to deduct 80% of these costs in their income tax return. This percentage also applies for persons with income from other work. Businesses who file for corporate tax are allowed to deduct 73.5%.
    • You may not deduct food, drink, or stimulants consumed privately.
    • The item ‘food’ comprises business lunches and dinners (including tips).
    • ‘Drink’ means coffee, tea, milk, and non-alcoholic beverages.
    • ‘Stimulants’ are items such as cigarettes and cigars.
  • Representation, conferences, seminars, study trips (including travel and staying costs): There is a € 5,600 threshold in 2024. Instead of this threshold, businesses are allowed to deduct 80% of these costs in their income tax return. This percentage also applies for persons with income from other work. Businesses who file for corporate tax are allowed to deduct 73.5%.
    • ‘Representation’ includes the cost of receptions, among other things. Promotional gifts are also usually ‘representational costs’.
    • You may deduct a maximum of € 1,500 for travel and accommodation costs. Were you required to attend a conference or similar for work? In that case, the maximum does not apply.
  • Home telephone contract: 0%
  • Business phone calls on home phone: 100%
  • General literature: 0%
  • Professional literature: 100%
  • Work clothing: 100% Work clothing is clothing you wear (nearly) exclusively for business purposes. This must be clear from the outer characteristics, for example: a uniform or an overall. Can you also wear the clothing outside of your business? Then the clothing must contain a logo which covers a surface of at least 70 cm2. The logo must refer to your business.
  • Clothing (other than work): 0%
  • Personal care: 0%
  • Briefcases and such: 100%
  • Equipment and tools that do not belong to the business inventory: 0%
  • Relocating: limited
  • Fines: 0%
  • Company car: limited
  • Company costs private car: A fixed sum per kilometre
  • Business travel costs public transport, taxi, and airplane: 100% of the actual costs. You need to be able to prove you really incurred these expenses. Save your train ticket, for example. Do you travel using an OV chip card? Print your travel overview.
  • Vessels for representative purposes: 0%
  • Study costs: The costs you make to keep your professional knowledge up-to-date. The study costs must be made on behalf of your company. You may only deduct the expenses if you incur them to keep your professional knowledge up-to-date. If you make the costs to learn new skills or acquire new knowledge, you may not deduct the expenses.

Questions relating to this article?

Please contact the Netherlands Tax Administration, Belastingdienst