What are entrepreneurial deductions
As you've probably allready heard it's allmost allways fiscally beneficial to be an entrepreneur. That is mostly because of the entrepreneurial deductions. If you are a client with The Bookie we'll take care of your income tax return and apply these for you.
These benefits are a deduction from your profit and consist of:
- Self-employed deduction: this is a discount on your taxable income (profit) with which, if you're eligible, you have to pay less income tax.
- Startersdiscount: this is a an increase of the self-employed deduction. It can be applied in 3 times in the first 5 years of your self employment.
- Starter's deduction in case of occupational disability
- Discount for research and development
- Cooperation deduction
- Discontinuation deduction
If you are an entrepeneur for income tax purposes you are eligible for entrepeneurial deductions if you meet the hour criteria (1225 hours). If you are a co-titleholder you are not eligible for these discounts.
SME profitexemption
After the entrepeneurial deductions are applied, as a sole proprietor the SME profitexemption then automatically goes into effect. In 2020 the exemption is 14% of the profit, after you've deducted the entrepeneurial discounts ofcourse.
Incometax tool
If you want to get an idea of which discounts are applicable to your business and how this effects your profits, you can use our tool: https://www.thebookie.nl/tools/inkomstenbelasting/
PS. the calculations are aproximations only, no rights can be derived!
Example 1: 20.000 profit, no 1225 hours of work, no entrepeneur discounts
Example 2: 20.000 profit, 1225 hour criterium met, no starters discount
Example 3: 20.000 profit, 1225 hour criterium met, startersdiscount applied
