How to reduce income tax for the self-employed?

One way to reduce the tax burden would be to create a legal entity that you control and use it as a “middleman” between you and the customer. The income from the customer would then be subject to corporate income tax, rather than personal income tax. However, the income you do take out of this company will be taxed again at the personal income tax. If you wish to secure your retirement, you can set up a company pension that allows for untaxed contributions into your retirement.

Should the overhead of a company be too much, you can also reduce your income by deducting expenses, and you can deduct upto 20,000 eur/year by contributing it into a rurup pension scheme.

If you need any help assessing what the best option is for you, you can reach out to our advisors, and we will gladly assist you with the calculations.

At Horizon65 we can help you to determine if company pensions are worth it for you by using our mobile app to simulate its effect on your future taking into your existing investments and potential impact of inflation and taxation.

We regularly help our clients by comparing all the available company pension products on the market using our comparison portal or you can also directly get in touch with our experts to understand if it can be a good option for you.

 

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