What are deductible expenses?

Thinking about becoming self-employed or just recently started? You’ve probably heard that it’s a smart move to keep track of all your receipts—especially in Belgium. And it’s true: purchases you make for your business can be tax-deductible. In simple terms, business expenses lower the amount of tax you’ll need to pay. But what exactly counts as a deductible expense in Belgium, and what should you keep in mind? We break it all down for you in this article.

1. What are business expenses?
2. Tax-deductible expenses
3. Non-deductible expenses
4. Expenses if you work from home
5. Depreciation
6. Flat rate expenses
7. VAT deductibility
8. Is it a good idea to rack up business expenses?
9. Accounting

What are business expenses?

Simply put, any expense you incur for your self-employed activity falls under the category of business expenses. You need a desk, laptop, and the right tools to do your work, just as you need electricity and heating for your workspace or office. You attend networking events, take training courses, and, of course, you need food and drinks.

However, not everything can be classified as business expenses. Your purchase must meet the following conditions:

• The expense is work-related and necessary to generate revenue.
• You made the expense in the same year you’re claiming it.
• You have proof (invoice, receipt) of the expense.

💡Accountable tip: You can claim business expenses made up to 3 months before starting your business. Are you about to start as a self-employed person full-time or part-time? Keep track of your purchase and investment receipts now!

Which business expenses can you claim?

Some professional expenses, such as your social contributions or professional insurance, can be claimed 100%.

Other expenses can only be partially claimed. These are known as mixed expenses. Examples of partially deductible expenses include:

• Restaurant expenses (max. 69%)
• Gifts for clients (50-100%, depending on the purchase value)
• Gas and electricity (max. 15% for home office, 100% for a separate office space)
• Car expenses (depending on the CO2 emissions of your car)
• Internet and phone bills (max. 75% for home office, 100% for a separate office space)
• …

💡 Accountable tip: Accountable has developed a handy tool where you can check what percentage you can claim for each type of expense. Give it a try!

These business expenses are not deductible

Not all business expenses can be fully deducted, and some can’t be claimed at all—even if they’re related to your work. Here are a few examples:

• Speeding on your way to a client? Tough luck—traffic fines fall under the category of non-deductible expenses.
• Bought a stylish dress for a client meeting? Unfortunately, clothing is generally not accepted as a deductible expense. The exception? Professional attire, such as safety shoes required for your job or a jacket with your company logo, can be deducted.
• Took out a hospitalisation insurance policy? This is considered a personal expense and doesn’t qualify as a business cost.

More business expenses, less tax?

If things are going well, you’ll make a decent amount of money throughout the year from selling your products or services. The total of all those earnings is your revenue.

By subtracting the expenses you’ve racked up to keep your business running, you end up with your taxable profit. That’s the figure the tax office uses to calculate how much tax you owe.

The smaller your profit, the less tax you pay. So, in simple terms: the more business expenses you can claim, the less tax you’ll need to hand over.

💡 Want to know more about tax brackets in Belgium?

Which expenses can you deduct if you work from home?

Do you have a sole proprietorship? If so, it’s likely that your office or workspace is located at home. In that case, you can deduct the costs related to your home office as business expenses. This includes fixed costs like electricity, gas, and water, as well as office supplies and various insurance premiums.

What’s the difference between expenses and depreciation?

You can either deduct the full amount of a business expense all at once or spread the purchase costs over several years. In the latter case, this is called depreciation. The decision to depreciate an investment is subject to certain rules.

💡 Want to learn more about amortizations?

Claim actual business expenses or a flat rate?

You can also opt to claim flat-rate business expenses instead of proving your actual costs. This means you don’t have to keep track of receipts and invoices, saving you a lot of administrative hassle. However, the flat-rate expenses are limited. Additionally, your costs as a full-time self-employed individual are often higher than the flat rate.

Can you always deduct VAT?

The VAT you charge to customers and pass on to the tax authorities is not included in your business expenses. Similarly, the VAT you pay on purchases doesn’t count as part of your business costs either.

However, charging and paying VAT does offer some benefits. You can claim back the VAT you’ve paid on a purchase, which makes that computer or smartphone a bit cheaper.

Is it a good idea to rack up business expenses?

Don’t start throwing your hard-earned money around just because some expenses are tax-deductible—you’re still footing the bill in the end. Plus, not all expenses are fully deductible (that’s what we mean by fiscal deductibility).

Let’s say you spend €500. You usually can’t deduct the whole amount from your revenue. And even if it’s 100% deductible, the maximum tax relief you’ll get is about 50% (if you’re in the highest tax bracket). At best, you’ll save €250 on your tax bill, but the other €250 is gone for good. So, making unnecessary purchases just to claim deductions isn’t a smart move.

On top of that, there are rules to follow when claiming expenses as a self-employed professional. The key one? You need to prove that the expense is business-related and that it contributes to your business’s growth.

Always request an invoice

If your expense meets the requirements, you can usually claim VAT (partially) as a deduction if you’re VAT-registered. To do this, you’ll need a VAT invoice. This means you will:

• For online purchases, sometimes need to create a business account to receive a VAT invoice.
• Find yourself saying “can I have that on invoice?” more often than you’d like, even if there’s a long queue behind you.

💡 Accountable tip: Jot down your invoice details on a note you can hand over, or take a business card with you. Once you’re in the system, it’s a breeze to request a VAT invoice next time.

Collect your proof of expenses

You need to be able to prove your business expenses. This can be done with a VAT invoice, but even a simple receipt is acceptable. Just keep in mind, you won’t be able to claim the VAT back from a receipt.

With Accountable, you can easily scan all your invoices and receipts. The app also automatically applies the correct deductible percentage. Simple, right?

Try Accountable for free for 14 days!

FAQ – Business expenses in Belgium

Want to discover more deductible expenses? Take a look at Deductibles.be to make sure you don’t miss any! ✨