{"id":4285,"date":"2026-09-02T16:01:48","date_gmt":"2026-09-02T14:01:48","guid":{"rendered":"https:\/\/www.steensenpartners.nl\/?post_type=knowledge-base&#038;p=4285"},"modified":"2026-09-02T16:01:48","modified_gmt":"2026-09-02T14:01:48","slug":"is-a-foreign-taxpayer-entitled-to-the-full-business-expense-allowance","status":"publish","type":"knowledge-base","link":"https:\/\/www.steensenpartners.nl\/en\/kennisbank\/is-a-foreign-taxpayer-entitled-to-the-full-business-expense-allowance\/","title":{"rendered":"Is a foreign taxpayer entitled to the full business expense allowance?"},"featured_media":3944,"template":"","kb-category":[28],"class_list":["post-4285","knowledge-base","type-knowledge-base","status-publish","has-post-thumbnail","hentry","kb-category-tax"],"acf":{"hero":{"image":3944},"blocks":[{"acf_fc_layout":"text-fields","text":[{"acf_fc_layout":"text","text":"<strong>The Tax and Customs Administration has provided an answer to the question of whether an entrepreneur residing abroad is entitled to deduct the full business allowance (in Dutch: ondernemersaftrek) from their Dutch profits.<\/strong>"},{"acf_fc_layout":"title","title":"Entrepreneur\u2019s allowance "},{"acf_fc_layout":"text","text":"The entrepreneur\u2019s allowance comprises the self-employed person\u2019s allowance (in Dutch: zelfstandigenaftrek), the allowance for research and development (in Dutch: aftrek voor speur- en ontwikkelingswerk), the co-worker\u2019s allowance (in Dutch: meewerkaftrek), the start-up allowance in the event of incapacity for work (in Dutch: startersaftrek bij arbeidsongeschiktheid), and the cessation allowance (in Dutch: stakingsaftrek). These allowances may be deducted from business profits for the purposes of income tax."},{"acf_fc_layout":"title","title":"Foreign taxpayers "},{"acf_fc_layout":"text","text":"Foreign taxpayers are taxed in the Netherlands to the extent that they receive Dutch income. Dutch income includes, amongst other things, the profit generated by a foreign entrepreneur\u2019s permanent establishment in the Netherlands. The question is whether the entrepreneur\u2019s allowance may be deducted in full from the profit of this permanent establishment or whether a different allocation must be made?"},{"acf_fc_layout":"title","title":"Worldwide profit is the starting point "},{"acf_fc_layout":"text","text":"For the portion of the foreign entrepreneur\u2019s profit that is taxable in the Netherlands, the letter of the law first requires the global profit to be determined, i.e. the foreign entrepreneur\u2019s total profit, including profit earned outside the Netherlands. The Tax and Customs Administration states that the entrepreneur\u2019s allowance and the SME profit exemption (in Dutch: mkb-winstvrijstelling)are deducted in full from these worldwide profits. The profit taxable in the Netherlands is that part of the worldwide profit, after deduction of the entrepreneur\u2019s allowance and the SME profit exemption, which is attributable to the Dutch permanent establishment.\r\n\r\nThe business allowance is therefore not deducted in full from the profits of the permanent establishment, but in proportion to the ratio of Dutch profits to total worldwide profits."},{"acf_fc_layout":"title","title":"SME profit exemption "},{"acf_fc_layout":"text","text":"The Tax and Customs Administration states that the portion of the SME profit exemption that may be charged against the profit taxable in the Netherlands must be determined in the same way as for the entrepreneur\u2019s allowance.\r\n\r\n&nbsp;\r\n<p class=\"warningrtf\"><strong><span class=\"warningrtf-title\">Please note!\r\n<\/span><\/strong>According to the Tax and Customs Administration, the fact that the entrepreneur\u2019s allowance and the SME profit exemption must be determined in the manner described above also follows from a 2010 ruling by the Supreme Court (in Dutch: Hoge Raad).<\/p>"}]}],"taxonomy_for_related_articles":28,"sidebar":[{"acf_fc_layout":"team-member","team_member":3902},{"acf_fc_layout":"related-articles","type":"category","articles":null}]},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Is a foreign taxpayer entitled to the full business expense allowance? 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