Urencriterium - Basic Information About the Method and Calculation

What is the urencriterium and how can this information help an entrepreneur (zzp'er) obtain tax benefits and deductions?

The Belastingdienst established the hours criterion to prevent the use of tax benefits by self-employed entrepreneurs (zzp'ers) with minimal working hours and low turnover. To qualify, you must dedicate at least 1,225 hours per calendar year to your business. Importantly, it is the calendar year that counts, so even if you started your business in July, you must still spend at least 1,225 hours by the end of December.

You are entitled to count all time spent not only on directly providing services (direct hours), but also on administration, website maintenance, finding clients, business preparation, and purchasing materials.

Indirect hours can also include:

• Training courses and professional development
• Reading professional literature
• Consulting with your accountant
• Meetings with colleagues
• Writing proposals

Waiting time without active work does not count.

What you use to track hours is your choice — accounting software, a web app, or simply an Excel spreadsheet. The key is that you can show these records to the tax authority when requested and prove the time was genuinely spent on the business. Therefore, there is a requirement to retain records for seven years. For real estate matters, the retention period is ten years.

The tax authority also assesses the proportionality of your turnover and hours worked. The Belastingdienst calls this 'aannemelijk' (plausible): if you worked 1,225 hours, your turnover cannot be low. In the start-up phase, the tax authority accepts more unpaid hours, but the longer the business exists, the higher the turnover should be.

If you were on maternity leave (Zwangerschapsverlof) for part of the year, you can count those 16 weeks based on your average weekly working hours.

If you receive a disability benefit (arbeidsongeschiktheidsuitkering), you only need to spend 800 hours on your business. This applies to Wajong, WIA, WAO, WAZ, or Ziektewetuitkering recipients.

If you have a partnership (vof, Vennootschap onder firma) or civil partnership (maatschap), you can also use entrepreneur tax benefits. Each partner must independently meet the 1,225-hour criterion.

You cannot use these benefits if you are a partner in a private limited company (BV, besloten vennootschap).

If you are not only an entrepreneur but also work as an employee, the requirement to spend 1,225 hours on the business remains. Additionally, you must spend at least 50% of your working time on the business. This requirement does not apply if you are a starter.

Which tax benefits can you claim? We discuss this in the next article.