If you meet the requirements of the Chamber of Commerce (KVK) you can register as an entrepreneur. The Tax and Customs Administration then assesses whether you are also an entrepreneur for VAT and income tax purposes. Read what the Chamber of Commerce and the Tax and Customs Administration pay attention to and what this means for you.
Read more: jpost
When are you an entrepreneur for the Chamber of Commerce?
The Chamber of Commerce uses 3 criteria to determine whether you are an entrepreneur:
- You provide goods or services.
- You charge more money for it than it cost you to make. You earn money from it.
- You do business with other people than just friends or family. You also compete with entrepreneurs who sell the same or almost the same services or products.
Please note: The Tax and Customs Administration uses different conditions to assess whether you are an entrepreneur. It is therefore wise to also ask yourself these 4 questions:
- Do you invest money and/or time in the start-up or growth of your company?
- Do you regularly work in your own company and is it not a one-off job?
- Are you going to work for more than one client?
- Do you decide when and how you do your work?
The answers to these questions can help you decide whether to register with the Chamber of Commerce .
When are you an entrepreneur for VAT?
Have you registered your company with the Chamber of Commerce? The Chamber of Commerce passes on your details to the Tax and Customs Administration. The Tax and Customs Administration will then assess whether you are an entrepreneur for turnover tax (VAT) . They pay attention to these conditions:
- Do you independently run a business or profession?
- Do you have regular income?
- Do you have income in addition to your permanent employment?
- Are you trying to earn with a right or with assets, such as savings, investments or a (holiday) home?
Are you an entrepreneur for VAT? Then you are not automatically an entrepreneur for income tax purposes. This is because the Tax and Customs Administration pays attention to more conditions for income tax than for VAT.
VAT exemption with the small business scheme
Is your company based in the Netherlands and does your annual turnover not exceed € 20,000? Then you can participate in the small business scheme (KOR) . You then do not have to charge VAT to your customers. And you need to keep less administration. View the conditions of the KOR and how to register on Belastingdienst.nl.
When are you an entrepreneur for income tax purposes?
You may be an entrepreneur for income tax purposes if you sell products or provide services for payment. And if you can expect profit. Do you only do assignments for family members and friends or as a hobby? Then you are not an entrepreneur for income tax purposes. The Tax and Customs Administration determines whether your income counts as ‘profit from business’ for income tax purposes. If yes, then you are an entrepreneur. For example, the Tax and Customs Administration pays attention to:
Check deductions and special arrangements
As an entrepreneur for income tax purposes, you may use special arrangements. You then pay less tax. For example, with the entrepreneur ‘s allowance , the SME profit exemption , various start -up schemes and the small-scale investment allowance (KIA) . Under certain schemes, this is only allowed if you also meet the hours criterion .
Not an entrepreneur, but a result enjoyer
Are you not an entrepreneur for income tax purposes? But do you have income as a self-employed person? For example, as a mail deliverer or from one-off activities. Or if you sometimes do a freelance assignment in addition to your salaried job. Then you are a ‘result recipient’. Your income counts as a result from other work for income tax purposes . In that case, you are not entitled to the special arrangements for entrepreneurs for income tax. You can, however, deduct the costs you incur for your work from your profit. And maybe you are an entrepreneur for VAT purposes.
Self-employed? Avoid bogus self-employment
If you register as a sole proprietorship , there are also rules on how self-employed you are. In accordance with the DBA Act (deregulation assessment employment relationship), you must ensure that your working relationship is correct. For example, does your client determine how you do your work, or will you continue to be paid if you are on holiday or sick? Then there is a good chance that you are actually employed. This situation is called bogus self-employment. Check out how to avoid bogus self-employment .
