This measure is a proposal in the 2027 Tax Plan that the cabinet submitted on Budget Day, 15 September 2026, and parliament may still change it. Budget Day 2026 and the Dutch 2027 Tax Plan lists all measures in one table.
What the starter deduction is
The starter deduction comes on top of the self-employed deduction, and you get it at most three times in your first five years as an entrepreneur for income tax. You qualify when you meet the hours criterion of 1,225 hours a year, were something other than an entrepreneur in at least one of the five previous years, and used the self-employed deduction at most twice in those five years. The self-employed deduction in 2027 explains both deductions.
What the end costs
You subtract the deduction from your profit before tax. At a profit of €40,000 you are in the first bracket of 35.75% in 2026. After the SME profit exemption of 12.7%, you save about €660 in income tax with the €2,123 deduction. Your health insurance contribution is also about €90 lower. Together this is about €750 a year. At a higher profit, in the second bracket, you save about €900. Under the proposal, you save about €3 in 2027, because the deduction is only €10. From 2028 it is gone completely, so new starters lose it for all three years.
| Year | Self-employed deduction | Starter deduction (proposed for 2027 and 2028) | Total |
|---|---|---|---|
| 2025 | €2,470 | €2,123 | €4,593 |
| 2026 | €1,200 | €2,123 | €3,323 |
| 2027 | €900 | €10 | €910 |
| 2028 | €900 | €0 | €900 |
What to do in 2026
If you start this year, make sure you can prove the 1,225 hours for 2026. A weekly timesheet is enough. Anyone who starts in the autumn will usually fall short of the hours criterion for 2026. You need at least 1,225 hours in the calendar year, also in the year you start. Hours you spend preparing the business, such as market research or writing a business plan, also count. If you use the deduction in 2026, it is the last time you get the full amount. Under the proposal, it is only €10 in 2027, and 2027 is the last year of the deduction.
Owners who prefer to hand this over can use payroll and administration for a Dutch BV, where we prepare the payslips, the payroll tax, the bookkeeping and the annual accounts in English.
For an owner who lives abroad, the route is the same in every country, with the notary acting on a power of attorney, followed by the registration in the Dutch business register (KVK) and the tax numbers. Company formation in the Netherlands for non-residents gives the overview.
Does a BV make more sense now?
For most starters the sole proprietorship stays cheaper in the first year, because the self-employed deduction of €900 and the SME profit exemption of 12.7% remain, while a BV requires a salary of €58,000 or a lower salary agreed with the tax office. The loss of the starter deduction shifts the tipping point only slightly. From a profit of about €100,000, and with the wish to keep profit in the business, the BV wins. The DGA salary in 2027 has the comparison and BV incorporation costs 2027 the cost side.
The wealth planner 2027 works out what the plans mean for your salary, dividend, profit kept in the company and private wealth in box 3, with the 2026 and 2027 figures side by side.