Do not miss these income tax return tips

Do you have a sole proprietorship, general partnership (VOF), professional partnership (maatschap), or limited partnership (cv)? Then you have to deal with income tax. You can file your income tax return for the previous year between 1 March and 1 May. You can also request an extension until 1 September – but your request must be made before 1 May.

The Dutch Tax and Customs Administration automatically fills in your personal details. You complete the business details of the declaration yourself. Use applicable deductions and schemes to pay less income tax. The amounts mentioned apply to (the return for) the year.

Things to consider

• You can file your tax return until 30 April. If you filed before 1 April, you will hear before 1 July if you will receive a refund or have to pay. Was your income negative? In that case, the Tax Administration will offset this with your income from the previous 3 years and you may get a refund. Initially by looking at your income 3 years ago, and then the years after.
• Averaging (middeling) may save you money. If you earned less in 2022 than in 2021 and 2019, you can calculate the average income over those 3 years. If the tax for the average income is lower than in the individual years and the difference is greater than €545, you can get a tax refund. You can only use averaging once each year. The averaging scheme ends soon. The last years for which you can use averaging is the period 2022 to 2024.

1. Entrepreneur allowance and SME profit exemption

The Tax and Customs Administration has added the online tool 'OndernemersCheck' (in Dutch) to the online tax return. This allows you to check in advance if you have to file a tax return as an entrepreneur, if you have to fill in the profit part, and if you are entitled to an entrepreneur's allowance and other deductions.

The entrepreneur allowance is an amount that you deduct from your profit and can consist of different parts. You are eligible if you are an entrepreneur according to the criteria of the income tax. You must also meet the hours criterion, whereby you spend at least 1,225 hours on your company.

• The private business ownership allowance is an annual deduction of a fixed amount. The tax relief for new companies is an extra deduction in 3 of the first 5 years of the company. 
• WBSO is the R&D tax credit scheme. It is a deduction for innovative research work.
• The discontinuation relief is a deduction of a fixed amount if you end your business.

Due to the SME profit exemption, in 2024 you can deduct 13.31% from the profit after the entrepreneur allowance. The hours criterion does not apply to the SME profit exemption. You must be an entrepreneur according to the income tax criteria.

2. Investment deduction and depreciation

When investing in business assets, you can deduct an amount from the profit via the small projects investment credit (kleinschaligheidsinvesteringsaftrek, KIA, in Dutch). The scheme applies if you invest a minimum of €2,800 (2024) in a financial year and a minimum of €450 per business asset. You can also write off business assets. Then you divide the costs of business assets over the number of years that you use them.

In 2023, there was a one-off 'at random depreciation' scheme (willekeurige afschrijving bedrijfsmiddelen, in Dutch). On business assets covered by this scheme, you may depreciate up to 50% at random in 2023. On the remainder you apply normal depreciation. A special scheme also applies to starters. Under certain conditions (in Dutch), you determine the rate and amount of debiting yourself.

3. Business balance

The balance of your business bank account belongs on the balance sheet of your company. This concerns money that is needed as working capital or for an investment (in Dutch). It does not count for your income in Box 3. In 2023 and 2024, private assets above €57,000 per person are taxed. You have to transfer permanent excess liquid assets from business to private.

4. Cost Deduction for mixed costs

For 2023, only the amount above the threshold of €5,100 is deductible from the costs for business gifts, study trips, conferences, and also business lunches or drinks. In 2024, this is €5,600. You may also choose to deduct 80% of the mixed costs incurred by you. Then the threshold does not apply. Read more about the deduction of expenses (in Dutch).

5. Allowance check

An allowance (toeslag) is a contribution towards the costs that you have in your situation. There are allowances for the rental costs of your home, healthcare allowance, child budget, and childcare. The amount of your allowance is based on your income. Equity also counts for the first 3 allowances. If you can make use of the entrepreneur allowance, your assessment income will be lower. You will then be eligible for an allowance earlier. More information and a test calculation can be found on toeslagen.nl (in Dutch).

Help with taxes

Do you need support with your taxes? Find a tax expert (in Dutch), an accountant through the Royal Netherlands Institute of Chartered Accountants (NBA, in Dutch); SRA (in Dutch), or a tax adviser (in Dutch). They can help you with your taxes and allowances.