{"id":159,"date":"2015-03-04T10:52:51","date_gmt":"2015-03-04T09:52:51","guid":{"rendered":"https:\/\/vwg.nl\/uncategorized\/welke-kosten-zijn-zakelijk\/"},"modified":"2026-03-03T10:32:26","modified_gmt":"2026-03-03T09:32:26","slug":"which-expenses-are-business-related","status":"publish","type":"post","link":"https:\/\/vwg.nl\/en\/welke-kosten-zijn-zakelijk\/","title":{"rendered":"Which costs are business-related?"},"content":{"rendered":"

\"20150304_Ferrari_business_or_not_VWG_Nijhof\"<\/p>\n

When calculating business profits, a business owner may deduct expenses. Naturally, this is only permitted if those expenses are (sufficiently) business-related. When is this the case?<\/em><\/p>\n

To this end, it must be assessed whether the costs relate primarily to the generation of the profit (deductible \u2013 business \u2013 expenses) or to the expenditure of the income (non-deductible private withdrawals).<\/p>\n

The 100% golden rule is that in this context, the the entrepreneur\u2019s intention<\/span> is decisive. However, the Tax and Customs Administration is permitted to determine the extent of the costs marginal testing<\/span>. Put simply: if a business owner buys a car as part of the transport required to generate a profit, the tax authorities should, in principle, not interfere with whether they buy an Opel or a Mercedes. But what if a grocer opts for a Bentley or a Ferrari? Or what if, instead of one car, there are several (vintage) cars registered to the business?<\/p>\n

This test is also applied when a business owner wishes to deduct the costs of their hobby (for example, motor racing) or one of their children\u2019s hobbies (for example, horse riding) as advertising costs (sponsorship) against their profits. Similarly, for example, membership of a golf club intended for networking purposes or a business seat at a sports club is assessed by the tax authorities \u2013 with the approval of the tax court \u2013 against this criterion. Whether the costs can be (fully) deducted then depends on how well the business owner can substantiate their business-related nature.<\/p>\n

The best-known example of this marginal test in case law concerns the so-called Cessna judgment<\/em>. This concerns a situation in which a dentist chose to travel to his company\u2019s branches abroad in a private aircraft (a Cessna). The decision to use the Cessna for business travel was at the entrepreneur\u2019s discretion. However, the tax court has ruled that the tax authorities are entitled to assess whether a reasonable entrepreneur would also incur costs for the Cessna to that extent, having regard to the business interests of the company. If this is not the case, the costs may not be deducted from the profit.<\/p>\n

The Income Tax Act 2001 imposes a restriction on the deduction of certain specified types of expenses that are classified as business expenses. This applies (among other things) to the following expenses charged to profit, regardless of whether they benefit the business owner themselves or others:<\/p>\n