Fully, partly and non-deductible costs in your business (Netherlands)

When you run a business in the Netherlands, you will have costs. Some at the start, and many along the way to keep things running.

Those costs matter because they reduce your profit — and your profit is what you pay tax on.

Put simply:

Profit = income – business costs

So:

• higher costs → lower profit
• lower profit → less tax to pay

But (and this is important): not every cost is deductible.

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What are business costs?

You can only deduct costs that are made for the business interests of your company.

These are called business expenses.

Business expenses are costs that:

• are necessary to run your business (within reason), and
• directly relate to your business activities

Examples of typical business costs:

• advice on whether your business idea is viable
• registration with the Dutch Trade Register (KVK)
• rent for business premises
• stationery and office supplies
• setting up an office or workshop

Costs that are not related to your business are not deductible.

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You choose your costs — within reason

As an entrepreneur, you are free to decide:

• which costs you make, and
• how much you spend

The tax authorities mainly look at why you made a cost.

If it’s clear that a cost is fully business‑related, it is normally accepted as deductible.

Only when costs are clearly very high compared to the business benefit may the tax authorities step in and assess whether the expense is still reasonable.

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Mixed costs: partly business, partly private

Some costs are mixed. They have both a business and a private element.

In those cases:

• only the business part is deductible
• if the private part is dominant, the cost is not deductible at all

Examples of mixed costs:

• rent for a property partly used for business and partly for private living
• maintenance costs for such a property
• telephone costs
• a company car

The key question is always: what part of this cost is truly business‑related?

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Costs that are not deductible

Some costs are explicitly not deductible, even if they feel useful.

Examples include:

• getting a qualification that mainly benefits you personally (such as a driving licence)
• personal health costs (for example health insurance or a pedicure)

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In short

• Only business‑related costs are deductible
• Mixed costs must be split between business and private use
• Personal costs stay personal — even if you’re self‑employed

If you’re unsure whether a cost is deductible, it’s worth checking before filing your tax return. That’s where clear bookkeeping really helps.

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Deductible business expenses lower your taxable profit, which means you usually pay less tax. A simple habit that really helps: keep a clear overview of your business expenses and save all receipts and invoices as you go.

Frequently Asked Questions

General information, not tax advice. I am not a tax adviser (belastingadviseur); for your own situation, consider asking a qualified one.