Taxes on benefits, loans, and subsidies

Subsidies and your company profit

If you receive a subsidy, it counts as part of your company profits. You pay income tax or corporation tax on this every year. The costs you make and finance with your subsidy can be deducted from your profit.

Paying VAT on a subsidy

Usually, you do not pay VAT (turnover tax) on your subsidy. Are you an entrepreneur for VAT purposes? And do you receive the subsidy as compensation for the goods and services you provide? If so, you do pay VAT on your subsidy.

Example paying VAT on a subsidy:

1. You receive a subsidy to provide a certain facility in the city, such as a theatre or a museum. The subsidy is then not a direct compensation for your individual work. You do not pay VAT on the subsidy.
2. You organise an event and receive a fixed amount of subsidy per ticket sold. The subsidy is then a direct remuneration for activities. You do pay VAT on the subsidy.

Read more about subsidies and VAT (in Dutch) at Belastingdienst.nl.

Taxes on loans and your company profit

Has your business borrowed money? Then you may not deduct your repayments from your company profit. However, you may deduct the interest payments from your profits. This also applies to any application costs for the credit or loan.

Paying VAT on the costs of a loan

The costs of a loan (credit) are exempt from VAT. This includes the interest, any closing commission, and mediation costs.

Taxes on benefits

Are you receiving benefits? Such as unemployment benefit or social assistance benefit. And do you also have a profit from business? If so, you still have to pay income tax on your profit. Your profit from a business can also mean that you receive less benefit, or that it is ended completely.

Do you have any questions?

For questions about your subsidy, benefit, or loan, please contact the responsible authority. This may be a subsidy provider, implementing body or municipality, bank, or other credit provider.