Professional expenses lump sum now also for self-employed

Are you a self-employed entrepreneur, then you have as from tax year 2019 the possibility to deduct your professional expenses as a lump sum. Until now this was not possible, since only actual proven costs could be deducted from profits. As from now you can as an entrepreneur also opt for a lump sum deduction.

Lump sum

Advantage of a lump sum expenses deduction is that you do not have to prove the costs you actually made; it is not necessary to keep all your tickets, invoices or other means of proof.

You can maximum deduct 30% of your profit as professional expenditure, with an absolute maximum of 4.720 euro (tax year 2019) or 4.810 euro (tax year 2020). If you prove your actual expenses, the maximum amount does not apply. This is an advantage of proving your actual expenses.

Two activities, two lump sum deductions

In case you have two different professional activities, you can apply the lump sum deduction twice. E.g. you have a part time job as an employee for which you receive a salary and an independent activity as secondary profession generating profit. This is a big advantage, since you can apply the lump sum twice.

In 2018 you obtained:
- 10.000 euro as employee;
- 10.000 profit as self-employed.
You van apply the lump sum twice. The total amount of deductible professional expenditure amounts to: 6.000 euro = 3.000 euro as employee (10.000 x 30%) and 3.000 euro as self-employed (10.000 x 30%). Both lump sum deductions independently do not exceed the maximum amount of 4.720 euro. So they can both be fully used.
Compare this with the situation in which you have any activity from which you obtain 20.000 euro, or whereby you can only deduct professional expenses for both activities once. The maximum deduction then is 20.000 x 30% = 6.000 euro, but limited to the maximum amount of 4.720 euro.

Please note that when you are subject to a lump sum (flat rate) taxation, you cannot apply the lump sum deduction on top.

Social contributions are a separate category

Even when you opt for the lump sum expenditure deduction, you still separately deduct your social security contributions (prior to the lump sum deduction).

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