When you become self-employed (ZZP’er) in the Netherlands, the part that causes the most apprehension is taxes. The good news: the Dutch system treats the self-employed quite well thanks to a series of deductions that reduce what you pay. The less good news: you need to understand how VAT and income tax declarations work to avoid surprises. Here, I’ll explain it to you with the 2026 figures and a real example.
This guide is part of our complete guide to becoming self-employed in the Netherlands.
The two taxes for the self-employed
As a self-employed person, you deal with two main taxes:
- VAT (BTW): you charge it to your clients and remit it to the Tax Authorities. It’s not your money; you only collect it.
- Income tax (inkomstenbelasting): on your business profit. This does come out of your pocket, and this is where deductions come in.
VAT (BTW): What you charge and when you declare it
Most self-employed individuals charge 21% VAT on their invoices. Some sectors (food, culture, hairdressing, etc.) apply the reduced rate of 9%, and certain services are exempt.
VAT is normally declared quarterly. The mechanism is simple: you add up the VAT you charged your clients, subtract the VAT you paid on your business expenses (voorbelasting), and the difference is what you remit to the Tax Authorities (or what they refund you, if you paid more than you charged).
The small business scheme (KOR)
If your turnover is less than €20,000 per year, you can apply for the kleineondernemersregeling (KOR). With it, you do not charge VAT to your clients nor file VAT declarations. It’s convenient if your clients are private individuals (you are cheaper for them) and you have few VAT expenses to reclaim.
Note: if your clients are businesses (who deduct VAT) and you have significant expenses, sometimes it’s better not to enter the KOR in order to reclaim the VAT on your purchases. It’s a decision to consider based on your specific situation.
Income tax and self-employed deductions
Your business profit is taxed in Box 1 of your annual declaration, along with any other work-related income. But before applying the rates, self-employed individuals are entitled to several deductions that reduce the base. These are the 2026 figures:
| Deduction | 2026 | Condition |
|---|---|---|
| Self-employed deduction (zelfstandigenaftrek) | €1,200 | Meet the 1,225-hour criterion |
| Start-up deduction (startersaftrek) | €2,123 | First few years; max. 3 times in 5 years |
| SME profit exemption (mkb-winstvrijstelling) | 12.7% | For almost everyone, even without meeting the hours |
The hours criterion (urencriterium) is key: to access the zelfstandigenaftrek and the startersaftrek, you must dedicate at least 1,225 hours per year to your business (all hours count, not just billable ones: administration, marketing, training…). Keep a record of your hours in case the Tax Authorities request it.
The mkb-winstvrijstelling, on the other hand, applies even if you don’t reach 1,225 hours: it exempts 12.7% of your profit (after subtracting the other deductions).
Income tax brackets in 2026
Once the deductions have been applied, the Box 1 brackets are applied to the resulting base (for those who have not reached retirement age):
| Bracket | Taxable income | 2026 Rate |
|---|---|---|
| 1 | Up to €38,883 | 35.75% |
| 2 | €38,883 – €78,426 | 37.56% |
| 3 | More than €78,426 | 49.50% |
Important: these rates seem high because the first two brackets include social contributions (premies volksverzekeringen); they are not just tax. Furthermore, from the final amount, tax credits (heffingskortingen) —the algemene heffingskorting and the arbeidskorting— are subtracted, which significantly reduce what you end up paying. That’s why the actual effective percentage is lower.
An example with numbers
Imagine that in your first year you generate a profit of €50,000, you meet the hours criterion and are eligible for the start-up deduction. Let’s see how deductions lower your taxable base:
- Profit: €50,000
- − Self-employed deduction: €1,200
- − Start-up deduction: €2,123
- = Profit after deductions: €46,677
- − SME exemption (12.7% of €46,677): €5,928
- = Taxable base: €40,749
Thanks to the deductions, you pay tax on €40,749 instead of €50,000: about €9,250 less in base. The brackets above are applied to this €40,749, and then tax credits are subtracted, so the final tax is considerably lower than the nominal rate suggests. To calculate your exact figure, use the Belastingdienst simulator or consult an accountant.
Practical tips to avoid feeling overwhelmed
- Set aside the VAT as soon as you collect it. It’s not yours: keeping it separate avoids a quarterly shock.
- Save a % of your profit for income tax. As a self-employed individual, nothing is withheld at source; you pay when you file your declaration. Setting aside money monthly helps you avoid debts.
- Record your hours and your expenses. Hours, for deductions; expenses, because they reduce your profit (and many include recoverable VAT).
- Keep your administration for 7 years. It is mandatory.
A good accounting software (boekhoudprogramma) automates almost all of this: it invoices, calculates quarterly VAT, and reminds you of deadlines. For most self-employed individuals, it’s the best investment in the first year.
And remember that, in addition to paying taxes, it’s advisable to protect yourself: check out the guide to disability insurance (AOV) for the self-employed and, for initial registration, how to register with the KVK.
This article is for informational purposes only and does not constitute tax advice. The figures correspond to 2026 and may change; confirm them on belastingdienst.nl or with a tax advisor for your specific situation.
Do you have any questions about VAT or deductions? Ask me in the comments.
