The tax world never stands still, and as a business owner it is often difficult to stay up to date on everything. Therefore, we have briefly summarized the main points of all the changes and relevant issues that may be of interest to you and your business to end the year in the best possible way fiscally and get 2025 off to a good start. Do not hesitate to contact us if you have any questions, we will be happy to look at your personal situation together to optimize your current situation fiscally.
Important: All information in this article is based on the information available on the day of publication. Unfortunately, we cannot yet predict the future, and due to the flexible nature of legislation, certain numbers and rules may be different in the future.
Overview:
Income tax tips for entrepreneurs
Take advantage of higher SME profit exemption while it is possible
Take advantage of the reduced hour criterion in case of disability
Convert termination profit into annuity Tips for the IB entrepreneur
Prevent release of reinvestment reserve Tips for the employer
Be mindful of the place where virtual services are offered from Tips for all tax payers
Income tax tips for entrepreneurs
1. Check your profit position
At the end of the year, check your profit position. Is your profit high? Then it may be attractive to reduce your profit by bringing forward costs or a planned investment, for example.
2. Take advantage of higher SME profit exemption while it is possible
You can also choose to increase this year's profits by postponing expenses to next year. This is because you can still benefit from a higher SME profit exemption compared to next year. The SME profit exemption will be reduced from 13.31% to 12.7% next year.
3. Keep track of your hours
You may qualify for certain entrepreneurial deductions (think especially the self-employment deduction) if you meet the hour criterion. You meet the hour criterion if you spend at least 1,225 hours on your business. Check whether you have spent enough hours on your business this year.
Important note: You must be able to prove to the tax authorities in the event of an audit that you have worked 1,225 hours. You will have to keep track of this by means of, for example, an Excel sheet, emails and other documents that can substantiate your hour records in the event of an audit. The tax authorities apply a retrospective period of five years. Your records must be kept for at least seven years.
4. Take advantage of the reduced hour criterion in case of disability
If you receive disability benefits, you need to spend fewer hours on your business in the first five years to meet the hour criterion. In fact, there is a reduced hour criterion of 800 hours for entrepreneurs with Wajong, WIA, WAO, WAZ or Sickness Benefits.
Important note: If you interrupted your work as an entrepreneur because of your pregnancy, the hours not worked over a total of 16 weeks still count as hours worked.
5. Benefit from high self-employment deduction
You can still take advantage of the self-employment deduction for an amount of €3,750 this year, if you meet the hour criterion. The benefit is calculated at a rate of up to 36.97%.
Important note: In 2025, the self-employment deduction drops from €3,750 to €2,470 and it will continue to drop in the coming years. These reductions increase your taxable amount in future years, resulting in more income tax owed.
6. Check your business expenses
Check your business expenses. These expenses can be deducted from your profits, thus reducing your income tax liability. Here are some examples:
work clothes (need to meet certain requirements);
professional literature;
rent or depreciation on business premises or office space;
depreciation on business assets, such as computers, tools, or machinery;
business travel by car, public transportation, and cab;
entertainment, i.e. lunches and dinners with clients;
costs of eating and drinking away from home, if business;
business insurance;
marketing and advertising;
education and training.
7. Don't let losses disappear
Is your business in difficult times this year? If so, you can offset your business loss against any positive Box 1 income from the same year, such as wages.
Important note: A box 1 loss is offset against positive box 1 income from the 3 previous years and against positive box 1 income from the 9 following years. The loss offset has a mandatory sequence: first the 3 prior years and then the 9 subsequent years. Losses you cannot offset in those periods disappear. Those losses cannot be offset.
8. Convert termination profit into annuity
If you are going to sell (part of) your enterprise, or have sold it by 2024, you will owe income tax on the profit made from it. You can avoid this immediate settlement by “converting” this so-called termination profit into an annuity. This is because you can use the termination profit to pay annuity premiums or premiums for bank savings. You will then be entitled to an additional annuity premium deduction.
Tips for the IB entrepreneur
9. Apply the small-scale investment deduction
You may be eligible for the small business investment deduction if you have invested in business assets. The amount you may deduct from profits depends on the total amount you have invested per business. To qualify for the small business investment deduction this year, you must invest an amount between €2,801 and €387,580 in assets for your business.
Important note: Your right to the small-scale investment deduction expires if you exceed the maximum investment amount of €387,580. If you risk exceeding this maximum amount, it may be advisable to postpone (part of) your investments until next year.
10. Apply the MIA
The Environmental Investment Allowance (EIA) allows you to deduct up to 45% of the investment amount from profits. Check whether these environmentally friendly investments are still feasible this year or can be postponed to next year.
11. Apply the VAMIL
The random depreciation of environmental investments (VAMIL) allows you to depreciate an investment at any time. The arbitrary depreciation is limited to 75% of the investment cost. By depreciating sooner, you reduce your short-term taxable profit.
Important note: Consult the Environmental List which lists all assets that are eligible for MIA and/or VAMIL.
12. Apply the EIA
Take advantage of the Energy Investment Allowance (EIA) program. You can then deduct 40% of investment costs from profits. This reduces your taxable profit.
Important note: Consult the Energy List which lists all business assets eligible for EIA.
13. Beware of disinvestment addition
If you have sold or donated business assets for which you applied investment deduction in previous years, you may have to repay part of that deduction in the form of a disinvestment addition. Check in your administration whether the period of 5 years has passed since the purchase of the sold assets.
Important note: If your records show that you purchased the asset less than five years ago, it may be advisable for you not to sell the asset until early 2025. This may allow you to limit or even avoid a disinvestment addition.
14. Make your WBSO application on time
Do you want to start research and development work? Then you can submit a WBSO application 2025 to RVO until December 20, 2024. Under certain conditions, you can use the program Wet Bevordering Speur- en Ontwikkelingswerk (WBSO) to reduce the (wage) costs for these projects.
Innovative projects eligible for WBSO are:
the development of new (parts of) physical products, physical production processes or software;
technical-scientific research.
15. Put your profits in a reinvestment reserve
If you are going to sell your assets or have sold them this year, add your book profit on assets to the reinvestment reserve. This will prevent you from owing tax on that book profit immediately. The condition is that on the balance sheet date you have an intention to reinvest in another asset.
16. Prevent release of reinvestment reserve
If you formed a reinvestment reserve in 2021 for the profits earned from the sale of an asset, it is advisable to make another reinvestment before the end of 2024. If you do not do this, the reserve is basically released into the profits and taxed. Check whether you can avoid this.
Tips for the employer
17. Apply for labor cost benefit
Check whether you are eligible for the labor cost benefit (LKV). This is an allowance for employers who hire older or disabled employees. You can indicate in your payroll tax return which employees you believe are entitled to an allowance.
Important note: If you want to receive the LKV for an employee, that employee must first apply for a target group statement LKV within 3 months after this employee has started working or has been re-employed. After these 3 months, the employee is no longer entitled to the target group statement and therefore you will not receive the allowance. The date on which the employee sends the form applies as the date of application.
18. Make the most of the work-related costs system
Check whether you have correctly processed the allowances and benefits in kind you gave your employees this year and, where necessary, designated them as final taxable items for the work-related costs scheme. You cannot still designate allowances and provisions after the end of the year. The free margin under the work-related costs scheme is 1.92% up to a wage bill of €400,000 and 1.18% for wages above €400,000.
19. Beware of the pseudo self-employment
Check the contracts you have concluded with freelancers for a correct qualification of the employment relationship. This is because on January 1, 2025, the tax authorities will start checking and enforcing the rules on pseudo self-employment. Although formally there may be a contract of assignment, in practice the terms of employment closely resemble those of an employee. The tax authorities may conclude that there is a disguised employment relationship. This puts you at risk of fines and additional taxes. To assess the employment relationship, you can use the web module https://beoordelingarbeidsrelatie.nl of the Ministry of Social Affairs and Employment.
20. Lock in the home allowance
You can accommodate your employees for the additional costs of working from home by granting an exempt allowance of up to €2.35 per day worked from home. You can agree on a fixed amount per week or month. You then calculate the homework allowance based on the expected number of homework days per week. This way, the employee does not have to keep track and report the home work days. As of 2025, the exempt homework allowance will be a maximum of €2.40 per day.
Important note: You cannot grant both a travel allowance and a homework allowance for the same day worked tax-free.
21. Be mindful of additional taxable benefits for bicycles
If you make a bicycle available to your employee and the employee also uses the bicycle for private purposes, an additional taxable benefit applies. The addition is 7% of the original new value of the bicycle and must be added to the salary.
22. Be mindful of additional taxable benefits for cars
If you provide a car to your employee and this car is also used for private purposes, an additional taxable benefit applies. The addition is based on a percentage of the catalog value of the car. The addition rates for cars are applicable from the year the car is registered in the vehicle registration register and remain applicable for a maximum of five years. The addition rate for fossil fuel cars is 22% and for zero emission cars 16% in 2024 and 17% in 2025 up to a list value of €30,000 (above 22%).
23. Take advantage of the bpm exemption for vans
You can take advantage of the bpm exemption for vans this year only. With the disappearance of the bpm exemption as of 2025, the bpm rates for passenger cars will also apply to the purchase of a van by an entrepreneur. However, an exemption for emission-free electric vans will remain.
VAT-tips
24. Beware of VAT correction for private use of company car
If you provide a company car to your employees, you must pay VAT on the private use. If you do not keep records showing the private use of the car, a fixed percentage of 2.7% of the list price of the car applies as a VAT correction, including VAT and BPM.
Important note: You must pay the VAT for the private use of the car via the last VAT return of the fiscal year.
25. Take into account rate change for agricultural goods
Check whether the VAT increase from 9% to 21% in 2025 for certain agricultural goods will affect your business. These include the supply of agricultural goods such as non-food grains and legumes, seed potatoes for growing vegetables and fruit, (poultry) cattle and offal, beetroots, agricultural and horticultural seeds, roundwood, straw, animal feed, flax and wool.
26. Be mindful of the place where virtual services are offered from
If you provide virtual services in the form of cultural, artistic, sporting, scientific or entertainment services, next year the service will be taxed in the country where the customer lives or is established. This means that the VAT rules of that country will apply. Check your records to see if you need to take this into account.
Tips for all tax payers
27. Lower your box 3 assets
Consider selling investments this year to reduce Box 3 taxes. Also consider tax exemptions for green investments. Green investments are still exempt up to €71,251 this year (partners: €142,502), but this amount will drop in 2025.
28. Final chance for the averaging arrangement
You can use averaging one last time if you have strong differences in your box 1 income over 3 consecutive years. In that case you can get a tax refund. To do so, you will submit a request for averaging. The last period over which you can apply for averaging is 2022 through 2024.
29. Give a gift to your children
Consider giving a gift this year so you can take advantage of the gift exemption for children or grandchildren. The gift exemption for children is €6,633. The gift exemption for grandchildren or third parties is €2,658.
30. Bundle your healthcare expenses
Check if you have incurred healthcare expenses this year. You can deduct these costs under certain conditions. There is a threshold that depends on the amount of your income. The higher your income, the higher the threshold. Only healthcare expenses that exceed the threshold are deductible. This makes it fiscally attractive to combine healthcare expenses within one year if possible.
31. Hold off on selling your own home
If you are planning to sell your own home it may be worth your while to wait until next year. If you sell this year then the amount you receive will fall into Box 3 and you will pay taxes on it.
As you can read in this article, there are a huge number of year-end tips this year for ZZP and entrepreneurs. Fortunately, you are not alone, we are ready to assist you with all your questions. Together we are happy to look at your personal situation to optimize your tax situation.
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