Sole proprietorship or company in Netherlands: tax comparison
Taxes and contributions for a sole proprietor under each available system and for your own company, for a resident of the chosen country with the same profit.
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Form
Sole trader (eenmanszaak)
Sole proprietorEenmanszaak (winst uit onderneming, box 1)
Profit is reduced by the €1,200 self-employed deduction and the 12.7% SME profit exemption; the rest is taxed in box 1 at 35.75–49.50%, national insurance premiums included. Tax credits (general and labour credit) reduce the bill. On top comes the income-related Zvw health contribution of 4.85%.
Conditions
The self-employed deduction (zelfstandigenaftrek) applies only if you spend at least 1,225 hours a year on the business and more time than on other work (urencriterium); the 12.7% exemption applies regardless. Whether you count as an entrepreneur (several clients, own risk) is decided by the Belastingdienst; otherwise the income is 'resultaat uit overige werkzaamheden' without these reliefs.
If taxable income exceeds €78,426, the deduction and the 12.7% exemption save tax only at 37.56%, not at 49.50%.
Registration in the Trade Register (KVK) and for VAT (btw) is required; with turnover below €20,000 a year you can opt for the small business VAT exemption (KOR). VAT is not included in the calculation.
Same as the sole trader, but the self-employed deduction is increased by the €2,123 starter deduction — €3,323 in total; in this case the deduction is not capped at the amount of profit.
Conditions
At most 3 times in the first 5 years: in the previous 5 years you were not an entrepreneur in at least one year and used the self-employed deduction no more than twice. The hours criterion (1,225 hours) must be met.
Other conditions, the 37.56% benefit cap and the VAT rules are the same as for the sole trader.
CompanyBesloten vennootschap (bv) met directeur-grootaandeelhouder
Company profit is subject to corporate income tax of 19% up to €200,000 and 25.8% above. Dividends to the owner are taxed in box 2 at 24.5% up to €68,843 and 31% above; the 15% dividend withholding tax deducted by the company is credited against it.
Conditions
An owner who works for the bv (DGA) must by law take a customary salary (gebruikelijk loon) — in 2026 at least €58,000, or more if that is usual for the job. The calculation ignores this (no salary), so the real burden will be higher: the salary is taxed in box 1 with contributions.
Set up by notarial deed and registration in the Trade Register (KVK); the bv files a corporate income tax return every year. VAT registration and the KOR exemption (turnover up to €20,000) work as for a sole trader; VAT is not included in the calculation.
Business activity: IT and consulting services for business clients
The owner is below the AOW state pension age, has no fiscal partner and is resident in the Netherlands all year; no other income and no box 3 assets.
Sole trader: the Belastingdienst treats the activity as a business and the hours criterion is met; only the self-employed deduction (plus the starter deduction for starters), the SME profit exemption, the general tax credit and the labour tax credit are applied. Investment deductions, reserves, annuity premiums and loss carry-forwards are ignored.
Bv: the owner takes no salary (the customary salary rule is ignored — see the form conditions); when distributing, all profit after tax is paid out as a dividend in the same year. The tax part of the general tax credit (8.10/35.75) reduces box 2 tax; the 15% dividend withholding tax is a prepayment and is not shown separately.
VAT, the nominal health insurance premium (basispremie) paid to the insurer, voluntary disability insurance and municipal charges are not included.
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