Starter deduction: The tax boost for starting entrepreneurs

Hey there, enthusiastic starter! You have only just started your business and there is already so much coming your way. Good news: the Tax Authorities have a present for you in the form of the starter's deduction. But what exactly is it and when do you qualify for it? 

What is the starter's deduction?

The starter's deduction is an additional increase in the self-employed deduction and is intended to provide financial support to starting entrepreneurs. In concrete terms, this means that you can deduct an extra amount from your profit, which means you pay less tax. 

When are you entitled to the starter's deduction?

1. You are an entrepreneur for income tax purposes.
2. You meet the hour criterion: You spend at least 1,225 hours per year on your company. This amounts to about 24 hours per week. For starting entrepreneurs who start halfway through the year, this is calculated pro rata.
3. You have not run a business in one or more of the 5 preceding calendar years.
4. You have not applied the self-employed person's deduction more than twice in those years.

Some points to note about the starters deduction

• You may apply the starter's deduction in the first five years of your business and a maximum of three times.
• If you start your business during the course of the year, you can still deduct the full amount of the starter's deduction, provided you meet the hours criterion.

The financial impact

The starter's deduction can make a significant difference in your taxable profit. For example, in 2023 the amount of the starters deduction will be €2,123. This means that you can deduct this amount additionally from your profit on top of the self-employed deduction!

How do you claim the starter's deduction?

When completing your income tax, you indicate that you are entitled to the starter's deduction. Make sure you keep good records so that you can demonstrate that you meet all the conditions. 

Want to know more?

Tax matters can be complicated, especially if you are just starting out. Do you have questions or would you like to know more about how you can make optimal use of tax benefits such as the starters deduction? We are ready for you! Click here for personal advice and make sure you don't miss out on any tax benefits.