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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%.
How to apply?
You state the private business ownership allowance in your income tax return.
Prinsjesdag (Budget Day) 2019 announcement
On Prinsjesdag (Budget Day) 2019, the Ministry of Finance announced that the private business ownership allowance will gradually be reduced to €5,000 in 2028, divided into 8 steps of €250 and one step of €280. This measure has been implemented by the Dutch cabinet to harmonise tax conditions for entrepreneurs, such as self-employed professionals, and employees.
The measure is expected to come into force from 1 January 2020. This is subject to its acceptance by the upper and lower houses of parliament.