Startup deduction: What is it and how can you use it?

September 12, 2022

Startup deduction: What is it and how can you use it?

Perhaps you have heard of the startup deduction. And if not, the word 'deduction' of course always sounds good. The startup deduction is a deduction from your profit, which means you have to pay less income tax. The startup deduction is intended to stimulate entrepreneurship and increase the chance of having a successful business. In this article, we will explain everything you need to know about the startup deduction.

What are the conditions for getting startup deduction?
You must be entitled to self-employed deduction. 
You have not been an entrepreneur for income tax purposes every year in the past five years. So you are a starting entrepreneur.
You have used self-employed deduction a maximum of two times in the past five years. (So you can use startup deduction a maximum of three times in the first five years that you are an entrepreneur.)

How high is the startup deduction?
The startup deduction is €2,123 in 2023 and is not expected to change for the time being. The startup deduction is added to the self-employed deduction. It is therefore not possible to use startup deduction and not use self-employed deduction.

Do you have to apply for startup deduction yourself?
You do not have to apply for startup deduction. When you file your income tax return, you will be asked a number of questions on the 'Entrepreneur deduction' screen to determine whether you are entitled to startup deduction. The startup deduction will be automatically deducted from your profit if you are entitled to it.