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Starting a business over the age of 50

This information is provided by:Netherlands Chamber of Commerce, KVKNetherlands Chamber of Commerce, KVKStatistics Netherlands, CBSStatistics Netherlands, CBSNederlandse versie

Starting a business later in life? Prepare well and avoid liability with your private assets. Take advantage of tax benefits for business owners. If you receive a state pension (AOW), your Tax-relief for new companies and Private business ownership allowance will be 50% lower than for other entrepreneurs.

Starting a business over 50: how does it work?

There is a lot involved in starting a business. Follow the step-by-step plan for starting your own business. Your company officially starts from the moment you register in the KVK Business Register. KVK passes on your details to the Belastingdienst (Tax Administration). You do not have to register your business separately with the Tax Administration. If the Tax Administration records you as an entrepreneur for VAT purposes, you will receive your VAT tax number and your VAT identification number (VAT ID).

Have you built up private assets? Such as savings, investments, or surplus value on your home. Keep this in mind when choosing a legal structure. With some legal structures you are liable with your private assets for debts of your company. For example, if you have an eenmanszaak (sole proprietorship).

Use the tool Which legal structure suits your company to decide what structure is best for your situation.

Tax benefits for business owners

Tax-relief for new companies and Private business ownership allowance

You are entitled to the Tax-relief for new companies and Private business ownership allowance if you meet 2 conditions:

  1. You are considered an entrepreneur for income tax purposes; and
  2. You meet the hours criterion (in Dutch).

SME profit exemption

You do not need to meet the hours criterion to get the SME profit exemption.

Less income tax after reaching the state pension (AOW) age

If you have reached the state pension (AOW) age, you will pay less income tax (in Dutch).

Small businesses scheme (KOR)

Do you have a turnover of no more than €20,000 per calendar year? Then you might be entitled to participating in the Small businesses scheme (KOR). If you participate, you do not charge your customers any VAT.

Tax-relief for new companies and your state pension (AOW)

If you receive a state pension (AOW), then your Tax-relief for new companies and your Private business ownership allowance are 50% lower than for other business owners. That reduction takes effect as of 1 January of the year after you have reached the state pension (AOW) age.

Protect your income in case of illness or occupational disability

Disability insurance (AOV)

Entrepreneurs are not covered by the Sickness Benefits Act (Ziektewet). You will have no income if you become ill or incapacitated. With disability insurance (AOV) you insure yourself against loss of income. If you are over 50, you can usually no longer take out an AOV. Or you have to pay a higher premium to your insurer. The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) has insurances for starters for which you do not have to undergo a medical examination.

Crowdsurance or donation circle (bread funds)

You can cover income loss in case of illness with crowdsurance or a schenkkring (donation circle). Participants make arrangements among themselves and save money to support each other. They assume mutual trust and solidarity. If you are ill, the other members will give you a donation to supplement your income. A waiting period may apply. During this period, you will not get paid.

Well-known examples of a donation circle are Broodfonds (in Dutch, bread fund) or Voorzieningenfonds (in Dutch, provisions fund). Members of a donation circle often know each other. Crowdsurance participants do not know each other personally and are not required to attend meetings.

Building up a pension as a business owner

As a self-employed person, you have to take care of your own pension. Sometimes this is mandatory, depending on your profession or industry. Painters and plasterers, for example, are obliged to participate in a pension fund.

It is possible to continue your pension scheme on a voluntary basis for 10 years after employment. Contact the pension fund or pension insurer about this as soon as possible after the end of your salaried employment.

Starting a business while receiving Bbz or WW

Financial support for self-employed professionals (Bbz)

You can start your business from an assistance benefit. You can apply to your municipality for various forms of assistance based on the Besluit bijstandverlening zelfstandigen (Bbz). For example, a credit for working capital, or a temporary supplement to your income.

Starting a business while receiving an unemployment benefit (WW)

There are several ways you can start a business while on an unemployment benefit. With or without maintaining your benefit. You do usually need permission from UWV.

Using severance pay to start your own business

Were you fired and did you get severance pay (also known as transition payment)? You can use your net payment to prepare for the start of your business. Use your payment for training or coaching, for example.

Working with a model agreement

Are you going to work for a client as a self-employed professional? Bear in mind the wet DBA and do the OndernemersCheck (in Dutch) of the Belastingdienst (Tax Administration) beforehand to determine whether you are really an entrepreneur for income tax purposes. Work with a model agreement in which you record agreements with your client. With this model agreement, your client will know for sure that you are an entrepreneur. And that they do not have to deduct any payroll taxes.

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