When should an entrepreneur open an EMZ: at the beginning of the year or at the end? - Nalog.nl B.V.
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When will an entrepreneur open EMZ: at the beginning of the year or at the end?

09.11.2021

You have decided on a very big step - you start your business in the Netherlands. There are many questions before you. One of them is when to start your own business, for example, individual entrepreneurship or, in Dutch, eenmanzaak (abbreviated as EMZ): at the beginning of the calendar year or at the end of it? Let's figure it out.

We, like many other specialists, recommend opening an EMZ at the beginning of the year. Why?

New entrepreneurs are more likely to receive tax breaks. But there is one thing: it is imperative to meet certain conditions. One of them is to work at least 1225 hours a year on your business. Moreover, such hours are not distributed in proportion to the number of months ¬– it is the calendar year that is important.

Naturally, if you open your business at the end of the year, then you simply will not have time to work the required number of hours. That is why it is recommended to start your business at the beginning of the year.

Our reference:

If you, as an entrepreneur, have met the “hourly” criterion and your registered business income is more than 50% of your total annual income, then you will be able to receive additional deductions. In 2023, these deductions total up to € 5.030, which can be used to reduce taxable income. Agree, a nice perk!

The benefit reduces your taxable income by a measurable amount. Even if you start your entrepreneurial journey in July and work hard every day, you will have time to complete the required 1225 hours. However, if you start later, then you will definitely not be in time. We wrote in more detail about the "hour" criterion here.

It should be borne in mind that the above tax benefit will be beneficial to you only if you have something to reduce (that is, you get taxable profit for the year). So, you can open an EDZ at the end of the year? Yes, sometimes it’s better to do that.

Pay attention!

If you have a full-time, full-time job, then you will not be considered an entrepreneur.

Example: you work as an IT specialist in a large company. You have free time and you have decided to open your own chatbot business. In the eyes of the tax authorities, you are not an entrepreneur even if you gain the required 1225 hours. Accordingly, it will be possible to forget about the benefits.

In what cases is it more profitable to open an EMZ at the end of the year?

  • If you want to get KOR (Kleineondernemersregeling).
    KOR is BTW exemption. You can get it if you expect your annual income to be less than 20 euros.
    To earn KOR, you need to open EMZ at the end of the year, for example, in November. The fact is that you need to submit a request no later than 4 weeks before the start of the reporting period in which you want to start using this exemption. If you succeed, you will be exempted from paying BTW right from the beginning of next year.
    If you do not have time to do this, then you will have to make a BTW report for the first quarter of next year. You will not be able to receive your BTW exemption until the second quarter.
    Learn more about the system KOR we wrote here и here.
  • If you don't want to ask for KOR, but are going to make some big purchases this year, for example, office computers.
    Please note: if you want to return BTW for your purchases, then you do not need to request KOR, as in this case your return will be canceled.
  • If you already have a customer to whom you need to issue an invoice right now, as the customer insists on this, he wants, for example, to return BTW from your works / services.
    According to Dutch law, you cannot issue an invoice if your business is not registered. And, of course, you have no right to indicate any BTW there. Therefore, you should start registering your EMZ as soon as possible, otherwise you risk losing both the client and the profit.

What else is important to know?

  1. If you register as an entrepreneur and become a VAT payer (BTW), then you are obliged to submit VAT reporting. But, on the other hand, in any case, you will be entitled to a deduction (benefit) of 14% of your business income, which will not be taxed.
  2. All receipts of funds, if they are reflected in you as income from EMZ, go to your income from entrepreneurship, and if for one reason or another they do not belong there, then to income from other jobs.
  3. Remember that starting a business at the end of the year will result in additional annual reporting.
  4.   If you are impatient to start working for yourself right from the beginning of next year, then it is better to register your EMZ with the Chamber of Commerce (Kamer van Koophandel - KvK) in advance, in November-December, but when registering, ask to indicate the start date of the activity, for example, January 1 of the next of the year. It should be borne in mind that a certain time will pass until you register, receive all the necessary logins and passwords, open a bank account, etc.
  5. Let's say that it is important for you that the registration documents indicate January 1, and this, as follows from the previous paragraph, is quite possible. By the way, you can register your business retroactively. The main thing, as we can see from the experience of registering our clients, is that such a "plug" is within 2-3 months.

Our reference:

When registering EMZ the personal presence of the owner himself and the presence of a valid identity document (passport or residence permit) is mandatory.

Order the EMZ/ZZP registration service at link. If you have any questions, you can book a consultation with our experts.

Good luck with your business!

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