As an entrepreneur in the Netherlands, you may be eligible for the private business ownership allowance (zelfstandigenaftrek,in Dutch). If so, you pay less tax because you can deduct a fixed amount from your annual gross profit. The private business ownership allowance is an important tax deduction for sole proprietors.
When do you qualify?
The conditions for the private business ownership allowance are:
- You are an income-tax-paying business owner. The Dutch Tax and Customs Administration (Belastingdienst) offers the Dutch-language tool OndernemersCheck with which you can check if you are an entrepreneur for income tax purposes.
- You meet the hours criterion (or check the Tax Administration's website, in Dutch).
- You have not reached the state pension age at the beginning of the calendar year (1 January). If you have reached the state pension age, you can deduct 50% of the amount of the private business ownership allowance.
Amount of the allowance
The Dutch Tax and Customs Administration sets the amount each year. You can find the amount you may deduct on their website. Check the amounts for 2021, 2022, and 2023 (all in Dutch).
Unrealised private business ownership allowance
Is your profit less than the private business ownership allowance? Then the private business ownership allowance is the same amount as your profit. The part you cannot deduct is the unrealised private business ownership allowance (in Dutch). The Dutch Tax and Customs Administration will offset this part in the subsequent 9 years.
How to apply?
You state the private business ownership allowance in your income tax return. Check the amount you are allowed to deduct with the Dutch Tax and Customs Administration (in Dutch)
