Tax Matters
You too, as a freelancer, have to pay taxes, just like everyone else in employment. In addition, you have to invest in yourself. This requires the necessary financial investments. Fortunately, there are a number of tax breaks that you can take advantage of when you start out. Click on the figures to see which ones they are.
Tax benefits
1. Self-deployed deduction
You can think of the self-employment deduction as a reward for the risk you take as an entrepreneur. You can claim the self-employment deduction, which significantly reduces the final amount you have to pay taxes on. If you meet the hour criterion (1225 hours worked), you may deduct a fixed annual amount of 7,280 euros.
2. Starter's deduction
The start-up deduction is an increase in the Self-Employment Deduction and is intended for start-up entrepreneurs. This is for starters who started in that tax year. The additional deduction amounts to 2,123 euros. To qualify for this, you must meet the following 3 conditions:
- You are entitled to the self-employed deduction.
- In the 5 years preceding the tax year in question, you have not used the self-employed deduction more than 2 times
- In that same period, you were not an entrepreneur for at least one year
3. Investment deduction
For example, when you start as a freelancer, you need to purchase new equipment to perform your work. To a certain extent, your investments are taken into account. If you have invested in business assets in a fiscal year, you may be entitled to the small-scale investment deduction (KIA). This applies to entrepreneurs who have invested between 2,301 and 314,673 euros in business assets.
4. Fiscal retirement reserve (FOR)
Unfortunately, as a freelancer, you don't automatically build up a pension. Luckily, as an entrepreneur you can annually reserve a portion of your profits for your retirement provision, also called the fiscal retirement reserve (FOR). You do not have to pay tax on this amount immediately: you get a deferral of payment. The amount you can set aside is subject to a maximum. In 2018, it is 9.44 percent of the profit, although you must take into account a maximum amount of 8,775 euros.