Dutch Tax Authority
Did you recently start a business, or are you planning to? Then this article is for you. Two tax benefits are disappearing at the same time one is already official, the other is still a government proposal. We'll explain both honestly.
The self-employment deduction (zelfstandigenaftrek) is an amount you can deduct from your profit before tax is calculated. Less taxable profit = less tax to pay. You're entitled to it if you're self-employed for income tax purposes and you spend at least 1,225 hours per year on your business. This is called the hours criterion and it includes indirect hours like admin, travel time and writing quotes.
The starter's deduction (startersaftrek) is an extra deduction on top of the self-employment deduction, specifically for people who just started out. It's €2,123 per year and you can use it a maximum of 3 times in your first 5 years. You don't have to use it in consecutive years — you have some flexibility to apply it strategically, for example in years when you earn more.
This is not a proposal this is already law. The self-employment deduction has been gradually phased down for years, but the pace has picked up significantly:
From almost €4,000 to €900 in three years. That's not a small adjustment that's largely dismantling the benefit. The government's stated reason: reducing the tax difference between self-employed workers and employees.
Important for your tax return: filing your 2025 tax return in 2026? The deduction is still €2,470 for that year. Filing your 2026 return in 2027? That's when €1,200 applies. This often causes confusion.
What's staying put: the SME profit exemption (MKB-winstvrijstelling) of 12.7% remains in place. After the self-employment deduction, you can deduct another 12.7% of your remaining profit. That's not nothing.
On 20 April 2026, the Jetten cabinet announced that the starter's deduction will be completely abolished as of 1 January 2027. No transitional arrangement, no exceptions.
But — and this is important — it is not yet law.
The proposal still needs to pass through both the House of Representatives (Tweede Kamer) and the Senate (Eerste Kamer). Only once both approve does it become official. So things could still change: the plan could be amended, delayed or even rejected.
We're following this closely and will update this article as soon as there's more clarity.
What we do know: the cabinet announced this as a way to fund a package of measures to address high energy and fuel prices. The political intent is there but legally it's not finalised yet.
Let's make it concrete. Say you start this year and make a profit of €35,000 in 2026.
In 2026 (both deductions still available):
From 2027 if the proposal goes through:
Difference: nearly €900 more tax per year on the exact same profit.
And compared to 2024, when the self-employment deduction was still €3,750, the difference in tax benefit comes to over €3,500 per year.
1. Planning to start? Think about your timing. If you register your business in 2026, you can use the starter's deduction this year already — and if the proposal goes through, 2026 will be your last chance. That said, don't start purely because of the tax benefits. Your business plan needs to hold up on its own.
2. Already used the starter's deduction? Check how many times. You can use it a maximum of 3 times in 5 years. Haven't used it 3 times yet? Then 2026 may be your last opportunity.
3. Take a critical look at your hourly rate. Less deduction = more tax on the same profit. A lot of starters set their rate too low and unknowingly compensate through deductions. That approach won't work as well going forward.
4. Keep track of your business expenses. Phone, laptop, mileage, training, software — these are all deductible costs. Those deductions aren't going anywhere. Make sure your admin is in order so you don't miss anything.
5. Don't wait for certainty on the starter's deduction. Whether the abolition goes ahead or not — the self-employment deduction is going down regardless. That's already law. Adjust your expectations and your budget for that now.
The self-employment deduction is shrinking every year that's law and it's happening. The abolition of the starter's deduction from 2027 is a serious government proposal, but not yet law. We'll keep you updated as soon as that changes.
What you can do right now: get your admin in order, review your rate, and think carefully about your situation. Need help with that? We're happy to take a look with you.
Questions about your tax return or want to know what this means for your specific situation? Just drop us a message.
🔄 This article will be updated as soon as there is new information about the starter's deduction.