Tax tips for sole proprietors

How to Make the Most of Your 2025 Tax Deductions

If you're a sole proprietor (SP), you probably already know that filing your tax return can be both rewarding and challenging. In 2025, you have a great opportunity to take advantage of a range of tax breaks and deductions that will help you reduce your tax burden and leave more funds for business growth.

We've prepared helpful tips to help you make the most of all your tax benefits. Also, if you'd like to simplify the tax filing process, our Tax NL team is always ready to help!

1. Separate personal and business property

This is a key mistake many entrepreneurs make. If you have commercial real estate or bank accounts that are on your business's balance sheet, they should not be included in box 3 (savings tax). Make sure you correctly report commercial real estate and business accounts on your tax return.

Council: If your business account accidentally ended up under "Bank and Savings Accounts," simply note that it was commercial invoice - and its remainder will not be taken into account box 3.

2. Don't forget about mileage deductions

If you use your personal car or bicycle for business travel (including commuting to and from work), you may want to consider €0,23 per kilometer as a business expense. This deduction can significantly reduce your tax bill.

3. Check your investments

If you have invested in equipment worth €450, you must account for the depreciation of these assets in your tax return. Also, if you have investments in energy-efficient technologies, you may be able to take advantage of additional tax benefits, such as EIA/MIA.

Council: Purchasing laptops, mobile phones, tools and other business essentials can allow you to get additional deductions!

4. Take advantage of startup opportunities

If you are just starting your business, you can take advantage of the opportunity arbitrary depreciation For new fixed assets, such as equipment or vehicles, this allows you to reduce your taxable income immediately, without spreading depreciation over several years.

CouncilConsider depreciating over multiple years to get maximum tax benefits!

5. Check the number of working hours for business deductions

To be eligible for business deductions, you must be working at least 1.225 hours per year in your business. For startups, there's a requirement to meet these 1.225 hours, but the requirements for the percentage of time devoted to business are more relaxed.

Council: If your partner works with you on an unpaid basis, he or she can help you get deduction for joint work.

6. Entrepreneurial deductions and SME exemption

If you meet the hours requirement, you can take advantage of self-deduction (Zelfstandigenaftrek) at the rate of €2.470There is also the possibility deductions for startups and other tax breaks for new entrepreneurs.

Council: All entrepreneurs can receive an exemption from income tax in the amount of 12,7% from your profit after deductions.

7. Make the most of tax breaks for pension contributions and insurance

In 2025, prizes for accident insurance (AOV) и pension contributions can be deducted from the tax base, which allows for a significant reduction in taxes.

8. Don't forget about old investments and expenses

If your profits from previous years did not allow you to fully utilize the tax benefits, then pending deductions can be included in the 2025 tax return. Also consider expenses incurred at the very start of the business (within 5 years prior).

9. Be careful when participating in the Broadfund

If you participate in a fund, the amount you contribute will be counted as part of your property in box 3 + January 1, 2025.

10. Use of a company car

If you use a company car for personal purposes, you will need to apply VAT adjustment at the end of the year. However, this additional VAT can be taken into account as business expense when calculating income tax.

Prepare in advance!

Before filing your tax return, make sure you have all the necessary documents:

• Annual reports on commercial accounts
• All VAT tax returns
• Bank statements
• All bills and receipts
• List of investments

CouncilAll documents must be kept for at least 7 years. Be sure to scan receipts, as paper fades over time.

Filing a tax return can be complex and confusing. Our team of professionals at Nalog NL is ready to assist you with every aspect of filing. We guarantee accuracy, minimized tax liabilities, and maximum utilization of all available deductions and benefits.

Contact Us  to file your tax return on time and without any hassle!

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