Every entrepreneur has to deal with taxes and deductions, that's for sure. Think of VAT and income tax, for example. But fortunately, there are clever ways in which you can pay less tax. In this article, we would like to explain which taxes you have to pay and how to make use of so-called deductions.
What taxes do you pay as an entrepreneur?
For entrepreneurs, these are the 4 most important taxes:
- VAT (sales tax): You charge VAT on your products or service. You pay this amount back to the tax authorities. Good to know: you can often reclaim the VAT you pay yourself on business expenses.
- Income Tax: This is the tax you pay on your profits. How much you pay depends on your total income.
- Corporate tax: Is your company a private limited company? Then you pay corporate tax on your company's profits.
- Payroll tax: Do you employ staff? Then you are obliged to withhold and remit wage tax to the tax authorities.
Important deductions for entrepreneurs
With the help of deductions, you can reduce your taxable profit. As a result, you pay less tax. The main deductions for you as an entrepreneur are:
- Self-employment deduction: As an entrepreneur, if you meet the hour criterion (spending at least 1,225 hours a year on your business), you will pay less tax on your profits.
- Start-up deduction: Are you a budding entrepreneur? Then in the first three years of your business, you can get an extra tax benefit on top of the self-employed deduction. This further reduces your tax burden.
- SME profit exemption: A certain percentage of your profit is exempt from tax. This applies to all entrepreneurs, regardless of the size of your business. As a result, you pay tax on a smaller portion of your profits.
- Business expenses deduction: Do you incur expenses for your business? For example, travel expenses, office supplies, marketing, training and insurance. Then these are often deductible. This reduces your profit on paper and you pay less tax.
Wondering how much tax you save? Use our calculation tool!
How to make the best use of deductions?
Good administration is half the battle. This overview will help you make maximum use of deductions and tax benefits. So make sure you properly record all business expenses and keep receipts. It is also a good idea to plan investments strategically. This way, you can spread large expenses over several years.
Sure you won't miss out on any tax benefits? Then consult one of our specialists. At Van Passe B.V., we are happy to help you keep your records in order to make the most of your deductions!
