Netherlands Business Expenses and Deductions Guide

General Deductibility Criteria

• The three criteria (zakelijk, noodzakelijk, gematigd): A business expense is deductible if: (a) zakelijk (business purpose) — the expense is incurred in the course of the business and serves a business purpose (not a personal purpose), (b) noodzakelijk (necessary) — the expense is appropriate for the business (the Belastingdienst does not second-guess business decisions — if a reasonable businessperson would incur the expense, it is necessary), and (c) gematigd (not excessive) — the expense must be proportionate. Excessive expenses (luxury hotel on a routine business trip, first-class travel for short flights) may be partially disallowed. The burden of proof is on the taxpayer — you must be able to justify the business purpose.
• Personal expenses (privé-uitgaven): Expenses that are purely personal (clothing suitable for everyday wear, cosmetic surgery, private school fees, holiday travel) are not deductible even if they somehow relate to the business. Mixed expenses (business and personal) must be allocated — the business portion is deductible, the personal portion is not. The Belastingdienst applies the "algemeen maatschappelijke uitgaven" standard — ordinary living costs are not deductible as business expenses.

Gemengde Kosten (Mixed Costs) — 73.5% Deductibility

• 73.5% rule for corporate tax: For corporate tax purposes, the following mixed costs are only 73.5% deductible (art. 11 Wet Vpb): (a) food and drink (restaurant meals, catering, business lunches), (b) representation and entertainment (receptions, parties, client gifts, sporting events), (c) gifts to clients and business contacts (including Christmas gifts, wine, flowers), (d) study and training costs that are partly personal, and (e) accommodation on business trips (hotels — but only if the accommodation is not separately identifiable as purely business). The 73.5% rule means that 26.5% of these costs are permanently non-deductible. For sole proprietors (eenmanszaak) and freelancers (ZZP), the same rule applies under box 1 (winst uit onderneming).
• Exclusions from the 73.5% rule: The following are fully deductible (not subject to the 73.5% limit): (a) staff parties and staff gifts (if primarily for employees, not clients), (b) travel and accommodation for business trips where the accommodation is clearly necessary (overnight stay required due to distance), (c) training costs that are purely business-related (no personal benefit), and (d) advertising and promotional costs (where the client does not directly benefit materially).

Business Car — Autokosten

• Tax-free mileage allowance — €0.23 per km: An employer can pay an employee a tax-free mileage allowance of €0.23 per km for business travel (reizen in het kader van de dienstbetrekking). The allowance covers all car costs (fuel, maintenance, insurance, depreciation). If the actual costs exceed €0.23 per km, the excess must be covered by the employer (and is deductible as a business expense). For sole proprietors (ZZP), the same €0.23 per km is deductible (using the actual costs method or the €0.23 rate — the ZZP can deduct the higher of the actual costs or the €0.23 rate on the total business km).
• Company car — bijtelling (private use addition): If the employee (including a DGA) uses a company car for private purposes, the private use benefit is taxed as bijtelling (private addition) — a percentage of the catalogue value (including VAT and BPM) is added to the employee's taxable wage. The rate in 2026: 22% for conventional cars (petrol, diesel, hybrid), 16% for electric cars (the preferential rate for EVs applies to the first €30,000 of the catalogue value — above €30,000, the rate is 22%). The bijtelling is reduced to 0% if the employee drives fewer than 500 private km per year (verklaring geen privégebruik — the employee must keep a mileage log to prove this).
• BPM (Belasting van Personenauto's en Motorrijwielen): A luxury car tax (BPM) is payable on the registration of a new car in the Netherlands. For conventional cars: BPM is based on CO₂ emissions (approximately €0–10,000 per car). For electric cars: BPM is €0 (zero-emission exemption). The BPM is included in the bijtelling base (the catalogue value).

Home Office Costs (Aftrek Werkruimte)

• Self-employed (ZZP, eenmanszaak): Home office costs are deductible if: (a) the workspace is a separate room (zelfstandige ruimte) used exclusively for business, (b) the workspace is essential for the business (the business cannot function without it), and (c) the home is the main business location. The deductible costs include: a proportional share of the rent (or €4–5 per m² per year for owner-occupiers), heating, electricity, cleaning, and insurance — calculated as a percentage of the floor area used for the business. The deduction is up to 20% of the total housing costs (but not more than the business profit).
• Employees and DGAs: Employees (including DGAs) with a home office can claim a home office deduction (thuiswerkvergoeding) from the employer — €2 per day (tax-free, introduced during COVID). The employer can pay this allowance without specifying the actual costs. The employee cannot deduct home office costs in the personal tax return if the employer reimburses the €2/day fee. DGAs with a home office used for BV work can claim the home office deduction from their BV (the BV pays the €2/day, which is deductible for the BV).

Record-Keeping — Administratieplicht (Art. 52 AWR)

• 10-year retention: All businesses must maintain adequate records (administratie) for at least 10 years (art. 52 AWR). This includes: (a) income and expense records, (b) invoices (incoming and outgoing — facturen), (c) bank statements, (d) contracts and agreements, (e) payroll records (loonadministratie), (f) VAT records (BTW-administratie), and (g) balance sheets and profit-and-loss statements. The records must be kept in a systematic and orderly manner — the Belastingdienst must be able to verify the tax return from the records within a reasonable time.
• Digital records: Digital records (administratie in digitale vorm) are accepted — the taxpayer must ensure the records are accessible and readable for 10 years. Cloud-based accounting systems (Exact Online, e-Boekhouden, Moneybird) are common in the Netherlands. The records must be exportable in a standard format (XML, PDF). The Belastingdienst can request the records in an audit — failure to produce readable records within a reasonable time may result in omkering van de bewijslast (reversal of the burden of proof).

For the full list of deductible business expenses and the gemengde kosten regime, see the Belastingdienst's Bedrijfskosten brochure. For the auto-bijtelling and the private use declaration, see our Employment Benefits Guide →. For startup costs and the first-year depreciation (willekeurige afschrijving), see our Starting a Business Guide →.