Which professional expenses can you deduct?

As a self-employed professional or company manager, you pay taxes on your net professional income. In other words, your gross income minus your professional expenses. Knowing which costs you can list and to what extent they are deductible is therefore crucial.

What are professional expenses?

You can deduct from your turnover most of the expenses you incur for your own business. The result is your net income, on which you are then taxed. The more expenses you incur for your business, the less taxes you pay. But an expense can only be deemed a professional expense if it meets these 4 conditions

• The cost must be related to your activity. Mixed expenses, which correspond to both private and professional use, can only be listed for the professional part. You can never enter private purchases.
• The expenses must be incurred or borne in the year in which you acquire the income.
• You incur the professional expenses to obtain or retain taxable income.
• You always have an invoice, bill or other proof of purchase.

You do not always get a supporting document for some expenses. Think of small office expenses, conferences abroad or the mixed use of a car (car wash and petrol/diesel). In your accounting, you must therefore use other means to prove these expenses, such as witnesses or fact-based presumptions.

The partially or fully deductible professional expenses

Fully deductible expenses

Most of your company’s operating costs are 100% deductible. These would include the telephone bill, office supplies, social security contributions, voluntary supplementary pension, insurance policies and your bookkeeper’s fee.

What if you use part of your home for your own business? In that case, you may deduct costs such as mortgage interest, rent, heating and electricity expenses proportionally to the professional use. For example: you use an office space in your home to perform your administrative tasks. Since the room covers 15% of your home’s surface area, you can also deduct 15% of the total accommodation costs.

Partially deductible expenses

Some purchases can only be partially deducted. For example, business meals in restaurants are deductible up to 69%. You can only enter half the costs of a reception.

The statutory fixed amount

As a self-employed person or holder of a liberal profession, you can opt for a flat-rate deduction of 30% of your professional income for professional expenses (social security contributions and the purchase of goods excluded). This with a maximum set at 5.520 euros for the 2014 tax year (income 2023). You are not required to keep invoices or other documents to justify your purchases. 

This rule is mainly aimed at self-employed people who cannot easily justify professional expenses or self-employed people who develop a modest activity and do not want to keep tedious accounts.

A bookkeeper will tell you which approach is the most advantageous for you.