Entrepreneurship Criteria

### When are you an entrepreneur for income tax purposes?

Not every entrepreneur qualifies as an entrepreneur for income tax purposes. If you participate in economic activity and expect to generate profit, this is considered a source of income. Then you may be an entrepreneur for income tax purposes. Participation in economic activity means that you carry out activities for compensation outside the private sphere. If your activity takes place within the context of a hobby or family sphere, you are not an entrepreneur for income tax purposes.

For income tax, there are 3 sources of income:

1. Profit from business activities
2. Salary from employment
3. Income from other work (explanation at the bottom of this article)

Which source your income belongs to depends on several factors.

### Requirements for entrepreneurs for income tax

The law and case law set certain requirements that entrepreneurs must meet. After your registration, the tax authority evaluates whether you meet these requirements based on your circumstances. We look at:

• Are you making a profit? If so, how much?
• How independent is your activity?
• Do you have capital?
• How much time do you spend on your activity?
• Who are your clients?
• How do you advertise your activity?
• Do you bear risks as an entrepreneur?
• Are you liable for the debts of your business?

The tax authority evaluates all criteria listed above to determine whether you meet the requirements of entrepreneurship.

### What is income from other work?

Do you receive income from activities you perform? And you are not an employee, but the tax authority does not consider you an entrepreneur for income tax purposes? Then you have "income from other work." Your profit is calculated the same way as for entrepreneurs. But you are not entitled to certain entrepreneurial facilities, such as the self-employed deduction or investment deduction.