A Dutch tax dispute has put the gap between an accounting loss and a deductible business loss back in focus. For income tax, an activity needs an objectively reasonable prospect of profit. Repeated losses can weaken that case. Later profit does not automatically settle an earlier loss year.
Why this matters
A loss in your books is not automatically a tax loss. In that loss year, the activity must qualify as a source of income. KvK registration, invoices and long days do not settle it. Prices, demand, margins and costs must still point towards profit. The test can apply to one separate activity. Profitable freelance work does not automatically rescue a venture that keeps losing money. In a VOF, private top-ups can quickly become personal exposure.
Example
You and your VOF partner run a small resale business. Another weak quarter leaves unsold stock, supplier invoices and VAT waiting. One of you wants to claim the loss and fund a weekend promotion. The other sees new stock arrive before card payments land in the bank app. The accounts show a loss. They do not explain why profit still looked realistic. Keep margin calculations, realistic sales assumptions and dated cost decisions. Agree each partner’s private funding limit and when the model must change.
XTROVERSO tips
- Separate cash from tax. Open your bank app first. Check unpaid invoices, cash and your VAT pocket. Then ask whether this activity had a reasonable profit expectation in that loss year.
- Rework your route to profit. Calculate break-even using current rates, realistic hours, direct costs and fixed commitments. Hope is not a forecast. Client demand and workable margins are.
- Keep the why behind the numbers. Save forecasts, quotes, client messages, pricing calculations and cost decisions. Basic business records generally have a seven-year retention period.
- Set a VOF funding boundary. Write down each partner’s contribution and spending authority. Include the debts that remain if you stop, plus the point where the model changes.
- Check a major loss before filing. Is the loss large, repeated or disputed? Ask a qualified Dutch tax professional to check the facts and evidence before you file or object.
Not sure your loss file shows a real route to profit? Get your numbers and decisions clear before you file
The data, sourcing, and analysis behind this article were conducted by Paolo Maria Pavan. AI was not used to identify sources, build the factual basis, or produce the analytical judgment contained here. AI was used only as a drafting aid. The final English text was personally reviewed, edited, and approved by Paolo Maria Pavan before publication.
References
- Taxence — ECLI:NL:RBGEL:2026:6464, Rechtbank Gelderland
- Rechtspraak — ECLI:NL:RBGEL:2026:6464
- Belastingdienst — Bron van inkomen
- Belastingdienst — Ondernemer voor de inkomstenbelasting
- Belastingdienst — Administratie bijhouden
- Wettenbank — Wet inkomstenbelasting 2001
- Kamer van Koophandel — Vennootschap onder firma
