The hourly criterion is a key to a lot of tax benefit. The entrepreneur who works in a calendar year for at least 1,225 hours plus more than half of the time available for work in and for his company is entitled to multiple deductions.
The last criterion applies only if he is no starting entrepreneur anymore. Which posts should you think about? Some examples include the self-employed and starter deduction, deduction for research and development work, co-deductions or additions to the old-age reserve. These deductions may amount to thousands of euros to tax benefits. But here’s a little under the grass. The entrepreneur who wants to use those posts, and thus does not want to miss, must be able to prove that he meets the so-called hourly criterion. He is forced to write time, setting up a weekly hourly registration, which represents his actual time spent. If you do that afterwards, for example after a quarter or a year, it will not be accepted, so it is apparent from the necessary judicial statements. Are you able to provide an overview of your computer usage, then it does not offer a solution. At least according to a decision of the Arnhem-Leeuwarden Court recently.
Taxpayer is an independent lawyer. He claims in his declaration income tax 2011 the self-employment deduction. The inspector refuses the deduction because he has not fulfilled the hourly criterion. Taxpayer had a turnover of 32,956 euros in 2011. His hourly rate is 150 euros and so he spent only 220 direct hours on his business. The inspector acknowledges that indirect hours also count within the hour criterion, but he is not credible over 1,000 indirect hours. What matters in this respect is that taxpayers can not provide hourly registration. In the subsequent procedure, taxpayer still provides his hourly registration. That registration consists of an overview of the times when a file on its computer has been opened, created or edited. The number of working hours involved has calculated taxpayers at 1.190 hours. In addition, he spent 40 hours supervising students, 115 hours of piket service and 50 hours of courses. That brings the total hours worked by taxpayer in and for his lawyer practice at 1,395 hours. However, the Court of Arnhem-Leeuwarden makes a brief assessment of this post-appointment schedule. The overview of open, created, or edited computer files is insufficient evidence, as it does not show which work has actually been performed and how much time has been involved. Furthermore, it is not clear whether work has been carried out in the light of the business interests of his lawyer practice. Taxpayer is also unsuccessful at the Supreme Court.
This entrepreneur therefore did not invest enough to qualify for the entrepreneurial deduction. Keeping accurate hourly registration, week by week and preferably day by day, and even during the performance of work, is not an easy and even unthankable task. But if the entrepreneur can prove that he meets the hourly criterion, he can give it a profound tax advantage. And that makes the writing well good because it yields well paid but above all declarable hours.