Income Tax

Income tax for entrepreneurs includes a variety of deductions. Here are some key ways TaxiTax can help you reduce taxable income

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Business Deductions

Zelfstandigenaftrek (Self-Employed Deduction)

A standard deduction that reduces taxable profit for self-employed individuals.

Startersaftrek (Start-Up Deduction)

An additional deduction available to new entrepreneurs, aimed at easing initial tax burdens.

MKB-winstvrijstelling (SME Profit Exemption)

A 14% profit exemption applied after other deductions, lowering overall taxable income.

Investment Deduction

Provides tax relief for business investments, including purchasing a taxi, which can be a significant deduction for taxi entrepreneurs.

Personal Deductions

Donations

Charitable donations to registered organizations (ANBI) are tax-deductible, reducing overall taxable income.

Healthcare Expenses

Certain healthcare expenses, if not covered by insurance, can reduce personal income tax.

Mortgage Interest Deduction

Reduces taxable income by the mortgage interest paid, particularly beneficial for home-owning entrepreneurs.

Private Use of Company Vehicles

Using a company vehicle for private purposes affects your tax obligations if you drive more than 500 km privately per year.

Overview

If a company car is used privately for more than 500 km per year, the Dutch tax system requires adjustments to both income tax and VAT (Value-Added Tax). This ensures that the private benefit of using a business vehicle is taxed correctly. For private use under 500 km annually, you can avoid additional tax obligations by maintaining a “No Private Use” declaration and accurate mileage logs.

Private use of a business vehicle over the 500 km threshold results in two main adjustments:

  1. Income Tax (Bijtelling): A percentage of the car’s catalog value is added to your taxable income to account for private use. Standard vehicles are taxed at 22%, while electric and hydrogen vehicles are taxed at 16% for values up to €30,000. Older vehicles (15+ years) incur a 35% rate based on their current value.
  2. VAT Adjustments: When private use exceeds 500 km, VAT deductions are reduced to cover the benefit of private use. TaxiTax can assist with maintaining VAT compliance by accurately tracking mileage and managing VAT adjustments to avoid penalties.