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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 46%.
When do you qualify?
You must 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.