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As an entrepreneur in the Netherlands, you may be eligible for the private business ownership allowance (zelfstandigenaftrek). If so, you pay less tax because you are allowed to deduct a fixed amount from your annual gross profit.
When do you qualify?
- You are an income-tax-paying business owner.
- You meet the time criterion.
- You run the business alone or with others.
- You have not reached the state pension age at the beginning of the calendar year. If you have reached the state pension age, the private business ownership allowance will be reduced by 50%.
Corona crisis: relaxation of hours criterion
As a result of the corona crisis you may not be able to meet the hours criterion to be eligible for the private business ownership allowance (zelfstandigenaftrek). Therefore the Dutch Tax and Customs Administration has relaxed the hours criterion. In general this means that for the period 1 March through 31 May, you may presuppose that you worked for at least 24 hours per week in your business. Read more on the relaxation of the hours criterion (Versoepeling urencriterium, in Dutch).
Reduction in allowance
The private business ownership allowance will gradually be reduced to €5,000 in 2028. This will be divided into 8 steps of €250 and one step of €280. This measure is implemented by the Dutch government to harmonise tax conditions for entrepreneurs, such as self-employed professionals, and employees. The measure has come into force on 1 January 2020.
How to apply?
You state the private business ownership allowance in your income tax return.