For self-employed professionals (zzp’ers), the requirements for deducting expenses in the annual income tax return are much less strict than those for deducting VAT.
Dutch tax law applies the principle of freedom of evidence: an entrepreneur can use anything that supports an expense as evidence. The burden of proof is on the entrepreneur, and the tax inspector has the final say on whether the evidence is sufficient. In case of a dispute, the court decides.
You need to prove two things: that you actually incurred the expense and that you incurred it for your business. The business purpose must be the main reason for the purchase, and the Belastingdienst checks this: if an item is actually used privately, the expense will not be accepted. But if the business purpose is clear, the Belastingdienst does not assess whether the purchase was necessary. An expense will not be rejected just because a cheaper option would also have worked.
What counts as evidence
In practice, you can support an expense with an invoice, a till receipt, an order confirmation, an email from the seller or a screenshot from your online shop account. Other reliable documents that show exactly what you bought are also acceptable.
A bank transaction only proves that you paid. So combine it with a document that shows the business nature of the expense, such as a contract with a mobile operator, an insurance policy or an invoice from a supplier.
Whatever the document, it must clearly show the purchase date, the seller (the name of the shop or platform), a description of what you bought, and the amount. The description is especially important: it is used to assess whether the expense is related to your business.
When a document is not valid for VAT
Sometimes a document does not even meet the requirements for a simplified invoice: the seller cannot be identified, or the VAT amount is missing. In that case, you cannot deduct the VAT separately, but the expense itself remains valid.
You can deduct the full amount, including VAT, as business expenses (bedrijfskosten) in your annual tax return if you have evidence of the purchase and of what you bought (a receipt, screenshot or email), and the expense was incurred for your business. So documents that are insufficient for VAT may still be enough for income tax.
Remember that an expense counts towards your profit when it is incurred, not when it is paid. An invoice received in December and paid in January is therefore an expense for the previous year.
Evidence does not make every expense deductible
Documents only show that you incurred an expense; they do not change the rules about what you can deduct. Some expenses are never deductible, such as your own meals, fines or personal care. Others are only partly deductible, such as representation expenses and business lunches, or must meet additional conditions, such as work clothes. For mixed expenses, such as a phone, you can deduct only the business portion.
Expenses for a workspace at home, including furniture, are generally not deductible unless the room meets the Belastingdienst’s requirements.
Finally, more expensive items (from € 450 excluding VAT) that you use for several years, such as a laptop or tools, cannot be deducted all at once. Instead, you depreciate them over several years.
How long and how to keep your documents
You must keep your business records for 7 years. For documents related to real estate, the period is longer: 10 years.
You can keep documents digitally, as a photo or scan, and then throw away the paper originals. Just make sure the date, seller, description, amount and VAT are clearly readable on the copy. Receipts fade over time, so take a photo right after the purchase.