Someone earning 200 euro a month from streaming and someone receiving 6,000 euro a month from a platform ask us the same question: am I an entrepreneur for this yet? And nearly everyone expects the same kind of answer, namely an amount. Above X you are an entrepreneur, below it you are not.
That amount does not exist. There is no turnover threshold below which your income is untaxed, and that is the most important misconception in this whole subject. What does exist: three tax categories your income can fall into, and a set of facts that decides which.
The three possibilities
Income you earn yourself lands in one of three boxes, and the difference is large:
- Profit from a business. You are an entrepreneur. You may deduct costs, you qualify for entrepreneur allowances, and you are liable for VAT. Fiscally this is often the most favourable box.
- Income from other activities. You do earn something, but not as a business. You may still deduct costs; the entrepreneur allowances you may not. This is the middle ground.
- Hobby. No taxable income, but no deduction either. And this box is far smaller than people hope.
It is not a choice you make yourself. You complete your return on the basis of the facts, and the Belastingdienst, the Dutch tax authority, can reach a different conclusion from yours.
What the Belastingdienst looks at
There is no formula, but there is a fixed set of viewpoints. The more of these apply to you, the sooner you are a business:
- Independence. Do you decide yourself what you make, when and for whom? For creators this is almost always yes, and it weighs heavily.
- Continuity and regularity. Do you post structurally, or was it a one-off? An account producing income every month is continuous.
- Scale. How much time do you put in, how much turnover comes out? No threshold, but an indicator.
- Profit motive. Are you out to earn money from it? A paid subscription model is a profit motive by definition.
- Entrepreneurial risk. Do you risk your income falling away, do you invest your own money in equipment, can you make a loss?
- Number of clients. Several platforms and brands point towards a business.
- Presenting yourself publicly. Do you have a public profile, do you promote yourself, can you be found? For a creator this is the work itself.
Run down that list and something stands out: the average creator scores on almost every point. You decide your own content, you do it monthly, you want to earn from it, you have invested in equipment and you have a public profile. That is why in practice we rarely meet a creator who genuinely falls into the hobby box once there is structural income.
Why "hobby" is almost never the answer
The picture going around is that small amounts do not count. That comes from a confusion with the small businesses scheme in VAT, which does have a turnover threshold, and with the former exemption for certain side earnings.
For income tax the rule is: if you do something with the intention of earning money from it, and you succeed with some regularity, it is no longer a hobby. A streamer receiving 150 euro a month in subs and donations from a channel he runs weekly has income that has to be declared. That it is little changes nothing about whether it must be declared, only how much tax you pay on it. And that can be nil.
That last point is what people miss: declaring and paying are two different things. With the tax credits and your deductible costs, a small amount can come out at nil net. But then you have accounted for it properly, and that is exactly the difference between peace of mind and a letter three years from now.
The middle ground: income from other activities
There is a real category between hobby and business. You have income, but the scale and regularity are still too limited for a business. Think of someone doing a paid collaboration once a quarter, with no continuing stream beyond that.
In that case you declare your income as income from other activities. You may deduct your costs, so the camera and the software count. What you do not get are the entrepreneur allowances such as the self-employed allowance, and those are substantial. The difference between this box and a business can therefore be hundreds to thousands of euro a year.
For VAT this runs separately: you can be an entrepreneur for VAT and have no business for income tax. That feels inconsistent and it is, but they are two laws with their own definitions.
What changes once you are a business
The transition is not a formality, it gains you something. On the plus side:
- All business costs off your profit, see what can you deduct as a content creator
- Entrepreneur allowances if you meet the conditions, among them the hours criterion
- Part of your profit exempt through the SME profit exemption
- Investment allowance on larger purchases
- The VAT on your equipment back, because you are often in a refund position
Against that: registering with the KVK, the Dutch chamber of commerce, a VAT return every quarter, keeping records and retaining them for seven years. And your details enter the trade register, which for creators working anonymously is a serious point. We have a separate article on that: KVK registration and your privacy.
A worked example of the difference
Say you make 18,000 euro of platform income and incur 2,500 euro of business costs. Your profit is then 15,500 euro.
Declare that as income from other activities and it is your taxable income from that activity. Declare it as profit from a business and meet the hours criterion, and the self-employed allowance comes off first, then the SME profit exemption applies to what remains. The taxable amount ends up noticeably lower.
The exact amounts depend on the self-employed allowance and the exemption percentage for the year in question, and both have changed in recent years. So have those two numbers looked up for your year rather than copying an old example. What does not change is the direction: a business is more favourable in this example, and it is not a difference of tens of euro.
What to record to substantiate your position
Whether you are a business follows from the facts, and someone has to be able to see those facts. That sounds heavy and in practice it is a handful of things you have anyway:
- Your hours record. Not only for the hours criterion, also as evidence of scale and regularity.
- Your turnover by month. A rising line is a stronger story than an annual total.
- Your investments. Receipts for equipment show you put your own money in and therefore carry risk.
- Your public presence. Your profiles, your website, your pitch to brands.
- Your clients. Several platforms and brands point to independence.
Anyone who has this has no discussion. Anyone who does not has to defend a position with memories.
The direction this usually goes wrong in
The picture is that the Belastingdienst wants to write someone off as a hobbyist to block a deduction. In practice we see the reverse at least as often: someone thought it was a hobby, declares nothing for years, and is then told it was in fact a business. The tax for those years comes anyway, with interest, and the deductions from those years often cannot be substantiated any more because nobody kept receipts for a hobby.
That is the asymmetry worth remembering. Wrongly thinking you are a business costs you a struck deduction at worst. Wrongly thinking you are a hobbyist costs you the tax and the deduction across several years.
If you have been earning for a while without arranging anything
That is the most common starting situation in our first conversation, and it is better than it feels. The route is: establish from what moment you were in fact trading, register with that date, and put the open years right with the costs you actually had. Often the VAT in that is a refund rather than a bill.
What you can do today without speaking to anyone: download the full income history from your platforms and find the receipts for your big purchases. That is the material the rest can be reconstructed from, and it is the only part that genuinely disappears with time. See putting a backlog of returns right.
Frequently asked questions
I have a job and do this alongside it. Does that make a difference?
For the question of whether it is a business: hardly. For the hours criterion it does, because you have to spend 1,225 hours a year on your business to reach the self-employed allowance, and that is hard alongside a full-time job. See the self-employed allowance and the hours criterion.
When do I have to register with the KVK?
As soon as you are running a business, and in practice that is from the moment you start earning structurally. Waiting until an amount is reached is not a strategy: the obligation hangs on the facts, not on a counter.
What if the Belastingdienst sees it differently from me?
That can happen, and it happens in both directions. Someone who saw themselves as a hobbyist is told it was a business, or someone who claimed entrepreneur allowances has them struck because the scale was too small. It helps to keep your substantiation: your hours record, your turnover development, your investments.
I earn nothing at the moment but do have costs. Can I deduct them?
If you run a business with a profit motive, you can have a loss and set it off. That is not a trick but the normal course of things for a business starting up. The test is whether the profit motive is real.
In closing
The practical conclusion for almost every creator with structural income: you are a business sooner than you think, and that is usually good news rather than bad. The box you fall into decides not only what you must do, but above all what you may deduct.
If you are unsure where you stand, that is exactly the half-hour conversation we start with. How that goes is on how we work.