Income tax for the self-employed: a step-by-step guide

If you're self-employed in the Netherlands, income tax (inkomstenbelasting) is one of the two big annual tax obligations — the other being VAT. The good news is the logic is straightforward: you declare what you earned, deduct what you spent, apply tax breaks, and pay what's owed. This guide walks you through the whole system.

How income tax works for freelancers (the skeleton)#

You are taxed on your business profit — not your total invoices, but what's left after costs. The Dutch tax authority then applies three mechanisms in order:

1. Entrepreneur deductions (zelfstandigenaftrek and similar breaks that reduce your taxable profit)
2. The MKB profit exemption (an automatic 12.7% exemption for small businesses, in 2025/2026)
3. Progressive tax brackets (you pay tax on the remaining profit at rates that climb toward 49.5% at the top)

After that, you get final tax credits (heffingskorting, arbeidskorting) that lower your actual bill. You file once a year, and if you're earning above a threshold, you also pay monthly instalments (voorlopige aanslag) throughout the year.

Step 1: Calculate your profit#

Your profit is simply: revenue − deductible business costs.

If you invoiced €50,000 but spent €15,000 on software, equipment, office rent, travel, and other business expenses, your profit is €35,000. That €35,000 is what gets taxed — not the €50,000.

Read our detailed guide to calculating profit for a worked example and the rules on what counts as deductible.

Step 2: Apply entrepreneur deductions#

Once you know your profit, you subtract entrepreneur deductions. These are special breaks that the Dutch government gives to self-employed people to encourage starting and running a business.

The main ones:

• Zelfstandigenaftrek (the self-employed deduction): €2,470 in 2025 (being phased down; it was €3,750 in 2024). You don't have to earn that much — if your profit is €20,000, you still subtract €2,470. Learn more in the zelfstandigenaftrek guide.

• Startersaftrek: an extra €2,123 on top of the zelfstandigenaftrek, but only in up to 3 of your first 5 years in business, and only if you meet the hours criterion (1,225 hours/year on your business). See the startersaftrek post for details.

• MKB-winstvrijstelling (small-business profit exemption): 12.7% of your profit (after the above deductions) is automatically exempt from tax. In 2025/2026 this is worth about 12.7% — the rate has been trending down slightly.

So if your profit is €35,000:

• Minus zelfstandigenaftrek (€2,470)
• = €32,530
• Minus startersaftrek (if eligible, €2,123)
• = €30,407
• Then 12.7% of that is exempt from tax

This system stacks, which is why understanding deduction stacking is useful.

Step 3: Apply tax brackets and credits#

After deductions, what's left is your taxable income. You then pay tax at the Dutch progressive rates, which roughly go:

• Two lower brackets at around 36–37%
• A top bracket of 49.5% for income above roughly €76,000–€78,000

These brackets change yearly and vary slightly by age and circumstance. For the exact current brackets, check belastingdienst.nl, or read our box 1 brackets post for more context.

Then you get two main tax credits:

• Heffingskorting (general credit): roughly €3,200+
• Arbeidskorting (labour credit): up to roughly €5,500+ if you earn income from work

These bring your actual tax bill down. Your accountant or tax software calculates all this; you don't have to do the math yourself.

Step 4: File your annual return#

Once a year — filing window 1 March to 1 May — you file your income tax return (aangifte inkomstenbelasting). If your profit was high, you've probably been paying monthly (voorlopige aanslag) instalments all year. The annual return either tops up what you've already paid or gives you a refund.

The deadline is 1 May (for tax year 2025 → file by 1 May 2026). You can request an extension (uitstel) if you need it. Learn more in the 1 May deadline post.

The deductions you can also claim#

Beyond the entrepreneur deductions above, you can deduct most business costs: office supplies, software, travel, equipment (via depreciation), and much more. The rule is simple: if it's necessary for your business and not a personal expense, you can likely deduct it.

See our complete tax deductions checklist for a full breakdown.

Monthly payments (voorlopige aanslag)#

If your previous year's income-tax bill was significant, the Belastingdienst may ask you to pay monthly instead of waiting until May. This is called a voorlopige aanslag (provisional assessment). You get a notice with the monthly amount due. If your profit changes mid-year, you can ask to adjust it. Read the voorlopige aanslag post for the full story.

What if you make a loss?#

If your business costs exceed your revenue in a year, you have a loss. You can carry that loss back to recoup tax from prior profitable years, or carry it forward to offset profits in future years. This is called verliesverrekening. Learn how here.

Frequently asked questions#

Income tax for freelancers is designed to be fair — you pay on what you actually earn, not on invoices, and you get real deductions for running your business. The filing is annual, so you have time to gather your figures. Set up good bookkeeping from day one, and tax season becomes manageable. ZZP Belasting helps keep your numbers ready to hand over to your accountant or to file yourself.

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