1. What exactly is the use of the hour criterion?
Are you an entrepreneur for tax purposes? Then you are entitled to a tax benefit, also known as an entrepreneurial deduction. If you can demonstrate that you have spent at least 1225 hours on your own business in a calendar year, you are entitled to this. Assuming an 8-hour workday, that equates to about 3 days or 24 hours a week. We call this minimum of 1225 hours for the hour criterion.
In 2021, these are the following tax benefits or entrepreneurial deductions:
- independent deduction
In 2021, you can deduct a fixed amount of 6670 euros from your profits.
- Starter deduction
Are you entitled to an independent deduction? Then you can also use the starter deduction 3 times within the first 5 years after starting your business. In 2021, the starter deduction is 2,123 euros.
- old age reserve
As an entrepreneur, you can tax-free reserve part of your profits for your pension. This is called your pension reserve. Discuss with your accountant or accountant if this is a good idea in your case, because if you stop your business before your retirement age, you will still have to pay tax on your old age reserve.
- Cooperation deduction
If your tax partner cooperates in your company, you may be entitled to an employee deduction. You can then deduct a percentage of your winnings. Exactly how much it is depends on the number of hours your partner works.
- Deduction for research and development work – WBSO
If you carry out research and development projects in your company, you may be entitled to a deduction via the Research and Development Work Act (WBSO).
2. Over what period do the hours count for the hour criterion?
The hour criterion covers a calendar year, so you count from January to December. It does not matter when you started your business. Even if you start July 1st, you must put at least 1225 hours into your business if you want to make use of tax benefits. The preparation hours you do before you start your business also count. Such as hours for a seminar, course or making your business plan.
3. What if I do not get 1225 hours due to the corona crisis?
If you do not reach 1225 hours due to the corona crisis, you can assume that you have spent at least 24 hours a week on your business. Even if you did not actually reach it. This exception applies to the following periods:
- March 1 to October 1, 2020
- January 1 to July 1, 2021
With this exception, the government prevents you from being eligible for deductions due to the corona crisis. The relaxation of the hourly criterion does not apply to the last quarter of 2020. For the last quarter, you assume the actual number of hours you have worked.
Seasonal work and disability
The exception also applies to seasonal industries, such as the catering industry and the festival sector. For the first half of 2021, they may use the number of working hours in the period 1 January 2019 to 1 July 2019.
In addition, the hourly criterion for (partial) incapacity for work of 16 hours per week or 800 hours per year has also been relaxed. Tax assumes that entrepreneurs in this category have spent 16 hours a week on their business.
Example of reduced hours criterion due to corona
You have a business from 2012, and your income is included in the profits from the business. In 2021, your tasks have dried up and you have taken a side job to bridge the crisis. You estimate that in 2021 you will spend a total of 800 hours on your business and 1,300 hours on your work. Thanks to the relaxation of the hourly criterion, you can count 24 hours a week in the months of January to July, even though you may not reach that number. This brings the total number of hours you work in your company to 1,400. You therefore meet the hourly criterion of 1,225 hours, and you have spent more time on your own company than on your paid work. You are therefore entitled to an independent deduction.
4. What hours can you count in the hour criterion?
All hours you spend at your own company can be counted in the hour criterion. This also includes your indirect hours on administration, maintenance of your website and customer acquisition. And of course the direct hours where you work on your task or job for your client.
Did you have a child? In that case, you can still count the hours you have not worked in the 16 weeks of your maternity leave in the hour criterion. This is based on the average number of hours you would normally work.
5. How do I keep track of my hours?
You must be able to account for your hours if the tax authorities request it. You are free to do this in your own way. In an Excel file, an app or via your accounting software e.g. It is also useful to save emails and agendas so that you can substantiate your time management when auditing. Tax can go up to 7 years back on revision.
6. What do the tax authorities mean by ‘plausible’?
If you want to take advantage of tax benefits, the hours you spend on your business must be commensurate with your revenue. In other words: you need to demonstrate that you have spent sufficient hours on your business. You do this with your time management. If you have just started your business, you will work more indirectly. It accepts Tax at first, but after a while this must be offset by revenue.
7. How does the criterion of reduced time in the event of incapacity for work work?
There is a reduced hourly criterion for entrepreneurs who receive early retirement benefits. If you have a Wajong, WIA, WAO, WAZ or Sickness Benefit, an hourly criterion of 800 hours often applies. Always discuss your plans to start a business with the benefit agency first, to gain insight into the implications for your services.
8. How does Tax control my time management?
You must file a tax return every year. In it, you indicate how much turnover you have and how many hours you have spent on your business. Tax checks randomly and then checks if you have actually worked 1225 hours or more at your business. Sometimes the tax authorities ask for proofs such as emails, agreements with a customer or bank statements. The inspector can also come to your home to check.
9. Do the 1225 hours also apply to a partnership, partnership or BV?
Even if you have a partnership or partnership, you can benefit from the self-employment and starter deduction or other forms of entrepreneurship deduction. You must then put 1225 hours per partner or partner in the company. Each partner or partner submits their own tax return. It is therefore possible that one partner or partner meets the hourly criterion and the other does not. In a BV you can not make use of independent and beginner deductions.
10. Does the hourly criterion also apply to part-time entrepreneurs?
If you are a part-time entrepreneur, meeting the hourly criterion can be a challenge. There is no adjusted hourly criterion for part-time entrepreneurs. Have you had a business for more than 5 years? Then you also need to spend more time per calendar year on your company than on other activities such as a job as an employee.