Business owners in the Netherlands may be eligible for the entrepreneur allowance (ondernemersaftrek, in Dutch). 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 36.93% in 2023. This was 40% in 2022 and 43% in 2021.
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 when submitting your income tax return.