If you run a business in the Netherlands, two tax rules affect almost everyone: the MKB profit exemption (mkb‑winstvrijstelling) and the rules for offsetting losses

They apply automatically — but they don’t always work the way people expect.

What is the MKB profit exemption?

The MKB profit exemption (mkb‑winstvrijstelling) reduces your taxable profit if you are an income‑tax entrepreneur.
In 2026, it is 12.7% of your profit after deducting any entrepreneur allowances.

The order always matters:

  1. Calculate your profit
  2. Deduct entrepreneur allowances (if applicable)
  3. Apply the 12.7% exemption

Who qualifies?

You qualify if your income is classified as profit from business (winst uit onderneming).

Good to know:

  • You do not need to meet the hours criterion
  • It is applied automatically in your tax return
  • It does not apply to BV profits
  • It does not apply to “result from other activities”

What happens in a profit year?

In a profit year, the exemption simply reduces the taxable amount.

Example:

  • Profit after deductions: €40,000
  • Exemption (12.7%): €5,080
  • Taxable profit: €34,920

The tax benefit is capped at a maximum rate (37.56% in 2026).

What happens in a loss year?

This is where it often surprises people.

If your business makes a loss, the exemption still applies — but now it reduces your loss by 12.7%.

That means:

  • your reported loss becomes smaller
  • you have less loss available to offset
  • this can be unfavourable, especially in early years

How entrepreneurial losses work

A business loss is part of your box 1 income.

If your total box 1 income becomes negative, you have a loss from work and home.

Step 1: Offset within the same year

Your loss is first offset against other box 1 income, such as:

  • salary
  • other business income
  • alimony received

Only the net result is taxed.

Step 2: Carry back (3 years)

If there is still a loss remaining, you can offset it against the previous 3 years.

This may result in a tax refund.

Step 3: Carry forward (9 years)

Any remaining loss can be carried forward to the next 9 years.

Losses expire if not used within these time limits.

Key takeaway

The MKB profit exemption (mkb‑winstvrijstelling) always applies and always reduces your result — which helps in profit years, but limits how much loss you can use — and that adjusted outcome is what determines how much tax you pay or how much loss you can offset across years.

Frequently Asked Questions

Do I need to meet the hours criterion for the MKB profit exemption?

No. It is applied automatically in your tax return to profit from business, without the hours criterion.

Does the exemption apply to my BV?

No. It doesn't apply to BV profits, and it doesn't apply to 'result from other activities' either.

What happens in a year with a loss?

The exemption still applies, but it reduces your loss by 12.7%. That leaves you less loss to offset, which can be unfavourable, especially in the early years.

Sources

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