Criteria for entrepreneurship set by the Dutch Tax and Customs Administration

Income tax
If you are registered with the Dutch Chamber of Commerce, you keep records and you send your invoices from your business. You pay income tax on your income. The amount of income tax you have to pay is determined when you submit the annual tax return. The Dutch Tax and Customs Administration assesses whether you are a ‘self-employed professional (zelfstandig ondernemer) or a ‘resultaatgenieter’ (recipient of income from other activities) on the basis of a number of criteria. This has consequences for how much tax you will pay on this income.

• Resultaatgenieter (recipient of income from other activities)
  If you do not meet the criteria for being deemed as a self-employed professional (zelfstandig ondernemer), but do send invoices in the name of your sole proprietorship (eenmaanszaak), the Dutch Tax and Customs Administration sees you as resultaatgenieter (recipient of income from other activities). Please note: you declare your income and costs op your sole proprietorship in your tax return under Inkomsten uit overige werkzaamheden (Income from other activities) and not under Winst uit onderneming (Profits from business activities). You are only eligible for the tax benefit ‘deduction of costs’ (kostenaftrek).
   
• Profits from business activities
  If you meet the criteria for being deemed as a self-employed professional (zelfstandig ondernemer) by the Dutch Tax and Customs Administration, you declare your income in your tax return under Winst uit onderneming (Profits from business activities). You are eligible for the following tax benefits: deduction of costs (kostenaftrek), investment credit (investeringsaftrek) and SME profit exemption (Mkb-winstvrijstelling).
  
  Do you also fulfil the hours criterion (urencriterium)? In that case, you are eligible for additional tax benefits. You must work at least 1,225 hours per year and 50% of your working hours for your business. The additional tax benefits are: self-employed deduction (zelfstandigenaftrek) and relief for new businesses (startersaftrek, max. 3 years).

False self-employment
In order to protect self-employed professionals against clients (and to encourage employers to employ workers), the government is combatting false self-employment. Self-employed professionals need to meet certain conditions in order to be considered ‘entrepreneurs’. Otherwise, the client runs the risk of an additional tax assessment (plus fine) for unpaid wage tax and national insurance contributions. You will find up-to-date information about false self-employment and the Assessment of Employment Relationships (Deregulation) Act (Wet DBA), among other things, on the website DigiPACCT.

The Dutch Tax and Customs Administration applies various criteria to determine whether you are deemed to be a ‘self-employed professional’ or a so-called entrepreneur. It means that you need to fulfil all criteria. You can do the OndernemersCheck (EntrepreneurCheck) on the website of the Dutch Tax and Customs Administration (in Dutch only). In this way, you can quickly assess your situation.

The most important criteria are:

• Your goal is to make a profit by working on (your own) assignments/commissions. You are putting time, effort and money into acquisition.
• You have at least three customers or clients. The relationship between the assignment/commissions is important in that regard. If 70% of your income comes from one client, the Dutch Tax and Customs Administration does not see you as an entrepreneur.
• You run an entrepreneurial risk: the risk that (in the event of illness) you will not receive assignments anymore, that you will not receive your money (the default risk) and investment risk. It's also important to have financial stability and savings.
• You work independently: you decide how and when you work, you determine your own prizes, you can engage someone else to perform the ‘assigned/commissioned’ work and you work with your own materials or equipment.

You do the assessment yourself on the basis of the OndernemersCheck of the Dutch Tax and Customs Administration and you act accordingly. The Dutch Tax and Customs Administration checks this through tax audits and/or an inspection of the client for false self-employment.