As a self-employed person, you can deduct professional expenses from your taxable income, which reduces the amount of tax you pay at the end of the year. Below is a practical overview of the main deductible expenses.
A professional expense, or deductible expense, is a cost that is tax-deductible. You can deduct it for tax purposes if you incurred it during the year in order to earn taxable professional income. Each expense must be necessary to run your business.
Please note that this article provides general guidance only. Tax rules may vary depending on your individual situation. When in doubt, ask your Tax Coach.
This article covers the conditions for deductibility, the main categories of expenses you can deduct, and the flat-rate alternative if you have few costs.
Income tax expenses
Each year, your deductible professional expenses are accounted for through your personal income tax return. The total amount of your expenses is deducted from your turnover, giving you your net professional income. This is the amount on which you pay taxes, so the higher your net income, the more tax you will pay at the end of the year.
VAT expenses
On most goods and services you purchase, you pay VAT. If you are liable for VAT yourself, you can in many cases recover it from the VAT administration (the government). There are strict conditions to watch out for:
The invoice must be 100% correct
The invoice proves how much VAT you paid. You can only recover the VAT if the invoice is completely correct. A lot can go wrong: the VAT percentage must be right and all required information must be included, such as your VAT number and a description of the goods or services. The tax authorities have become somewhat more flexible on the latter point. Even so, it is still very important that you check every invoice you receive carefully and have it corrected if needed. Doing so avoids many disputes with the VAT inspector.
Example: a supplier charges 21% VAT when it should only be 6%. You pay 21% anyway and try to reclaim that amount via the VAT return. You will only get 6% back, because wrongly charged VAT is not deductible, even though you paid 21%. It is your responsibility to verify that the VAT on an invoice is correct. If it is not, ask your supplier for a corrected invoice.
What are the conditions for deductible professional expenses?
Each expense must meet four conditions:
The expense is work-related. Private expenses cannot be entered.
The expense generates taxable income and keeps your business running. Examples include office equipment, machinery, or business meals.
The expense must be paid in the same year in which you want to deduct it from your taxes.
You need proof of each expense: an invoice, receipt, expense account, or VAT receipt.
Which expenses can you deduct?
100% deductible expenses:
There are many professional expenses you can fully deduct from your taxes when you have a separate office outside your home, such as:
Interest on your loan, including your car loan
Office equipment, materials, machinery, and clothing
All costs related to your workspace: heating, electricity, telephone, and internet
Social security contributions each quarter
Private Supplementary Pension for the Self-employed (PSPS) (PLCI in French, VAPZ in Dutch)
Professional insurance policies
Accounting fees and accounting tools like Accountable are 100% deductible.
Large investments to amortise:
Larger, more expensive investments have a longer lifespan. Think of an office, a car, a machine, or a laptop. You write off these investments annually rather than treating them as a one-off professional expense. For example, you can spread the cost of a laptop over three years, and the cost of a car over five years.
Some expenses are partially deductible:
There are many mixed professional costs when you have an office in your private home. As an expense, you can enter only the proportion corresponding to the area of the office space. This applies to internet, telephone, heating, electricity, and similar costs.
Having a home office also comes with some perks: you can deduct your Spotify expenses partially, and if you host clients at home you can deduct coffee, tea, or even flowers.Restaurant costs: 69%
Car costs: depends on the type of car you drive
Business gifts: 50%
Not deductible: traffic fines and non-specific clothing
Not making many costs?
You can opt for flat-rate professional expenses. These are determined as a percentage of your turnover. The higher your turnover, the smaller the percentage. The main advantage is that you do not need to keep proof of purchase and there is never any dispute with the tax authorities on this point. However, many liberal professionals choose classic professional expenses because those amounts are usually higher.
🎥 Want to learn more? Join our upcoming webinar 'Claim it right: top deductible expenses', hosted live by one of our Tax Coaches to answer your questions!
Looking for an expense that is not covered in this article? Use the deductible expenses search tool to find more costs you can deduct.
Key takeaways
Professional expenses must be work-related, generate taxable income, be paid in the relevant tax year, and be supported by proof.
Many expenses are 100% deductible when you have a dedicated office outside your home, including accounting tools like Accountable.
Large investments (car, laptop, office) are amortised over several years rather than deducted in one go.
Some expenses are only partially deductible: restaurant costs at 69%, business gifts at 50%, and home-office costs proportionally.
If you have few costs, flat-rate professional expenses may be a simpler alternative.
Need help? Chat with us or email support@accountable.eu, we're happy to help.