A year-end checklist has three parts. First you complete your books: reconcile the bank, go through unpaid invoices, count stock and work in progress. Then you make the tax decisions that are no longer possible after 31 December, such as investing for the small-scale investment allowance, paying annuity premiums and making donations. And if you have staff or a private limited company, you check the work-related costs scheme, your owner-director salary and your debt to the company.
All amounts below apply to 2026. What is already certain for 2027 is included. What is still a proposal from the 2027 Tax Plan, we call a proposal. That plan is not yet law on 17 October 2026.
In short
- Whatever happens after 31 December counts for 2027. So you arrange investments, annuity premiums, donations and gifts in December.
- Paying costs in advance usually does not lower your profit. Costs belong to the year in which your business benefits from them.
- As an owner-director the position on 31 December counts: if you then owe your company more than € 500,000, you pay tax in box 2 on the excess.
In this article
- What do you put in order in your books before 31 December?
- Should you still invest before 31 December for the small-scale investment allowance?
- Which deductions do you arrange as a business owner before the turn of the year?
- Does it help to pay costs in advance before the turn of the year?
- What do you arrange for your staff before the end of the year?
- What do you arrange as an owner-director before 31 December?
- Which deadlines follow in the first quarter of 2027?
- Frequently asked questions about closing the year
What do you put in order in your books before 31 December?
On 31 December your books must give an accurate picture of what you own and what you owe. That means: all bank transactions booked, all invoices included, and a count of stock and work in progress. Only then is the profit you pay tax on correct.
| Tick off | Why |
|---|---|
| Reconcile bank and cash on 31 December | The balance in your books must match the bank statement. A difference points to a missed entry. |
| Go through unpaid sales invoices | You see which customers you still need to chase and which receivable will not come in. |
| Go through unpaid purchase invoices | An invoice for work in 2026 belongs to 2026, even if it arrives in January. |
| Count stock | Materials on the shelf or in the van are money. What you count goes on the balance sheet, not into costs. |
| Record work in progress | Work that is half finished counts towards this year's profit. |
A customer who does not pay also costs you VAT. You can reclaim that VAT as soon as it is clear the receivable will not come in. The receivable counts as uncollectable at the latest 1 year after the final payment date (Belastingdienst, uncollectable receivables). So check in December which invoices from 2025 are still open. If the customer pays after all, you declare that VAT again.
Work in progress is work you have taken on and partly done, but not yet delivered. For a roofer, for example, it is a roof that is half laid on 31 December. For an installer, a bathroom where the pipework is done but the fittings are not. The law says you value that work at the part of the agreed price that belongs to the work done (Income Tax Act 2001, article 3.29b). So part of the profit on that project already falls in 2026.
A simple method: estimate for each running project what share is finished. If a € 20,000 roof is 40% done, € 8,000 of work in progress goes on the balance sheet. This is a worked example. If you have already invoiced an advance, you deduct it.
Should you still invest before 31 December for the small-scale investment allowance?
Only if it takes you over a threshold of the small-scale investment allowance (KIA). The KIA is an extra deduction from your profit when you invest in business assets in a year, such as tools, a van or scaffolding. In 2026 you get 28% of the total if you invest between € 2,901 and € 71,683 (Belastingdienst, KIA table 2026).
| Total invested in 2026 | KIA |
|---|---|
| Up to € 2,900 | None |
| € 2,901 to € 71,683 | 28% of the total |
| € 71,684 to € 132,746 | € 20,072 |
| € 132,747 to € 398,236 | € 20,072 minus 7.56% of the part above € 132,746 |
| More than € 398,236 | None |
Two worked examples. If you invested € 2,600 this year, you get no KIA. If you buy a construction laser for € 500 in December, you reach € 3,100 and get 28% of that: € 868. If you have already invested € 70,000, your KIA is € 19,600. An extra € 10,000 van in December takes you to € 80,000, but your KIA only rises to € 20,072. You would do better to buy that van in January. The KIA amounts for 2027 are not yet known.
Note three rules. A business asset of less than € 450 does not count (Belastingdienst, KIA). You have invested once you have entered into the commitment, for example by signing a quote. But if the asset is not yet in use on 31 December, you get the allowance up to the amount you have already paid (Belastingdienst, conditions for investment schemes). And if you sell it within 5 years from the start of the year of purchase, you must repay part of the allowance (Belastingdienst, disinvestment addition).
American research shows that business owners respond to rules like these. After a temporary extra depreciation allowance, small firms invested 95% more strongly than large ones, especially when the benefit produced cash straight away (Zwick & Mahon, 2017). That was about an American scheme, not the KIA. It does show that the timing of a purchase matters. Only buy what you needed anyway.
Which deductions do you arrange as a business owner before the turn of the year?
Four things only count if they are arranged before 31 December: enough hours for the entrepreneur's allowance, annuity premiums, donations and gifts. After the turn of the year they fall in 2027.
- Hours. For the self-employed deduction you must spend at least 1,225 hours on your business in 2026. All hours for the business count, including quotes and bookkeeping. Your diary, timesheets and invoices help make that plausible (Belastingdienst, hours criterion).
- Entrepreneur's allowance. In 2026 the self-employed deduction is € 1,200, the starter's deduction € 2,123 and the SME profit exemption 12.7% (Belastingdienst, entrepreneur's allowance 2026). In 2027 the self-employed deduction falls to € 900. That is already law (Ondernemersplein). The government proposes to cut the starter's deduction to € 10 in 2027 (KVK, tax plans 2027).
- Annuity. You only deduct annuity premiums in the year you pay them, and only if you have a pension shortfall (Belastingdienst, deducting annuity premiums). Your annual allowance for 2026 depends on your income in 2025 and is at most € 35,589. Unused room from earlier years, the reserve allowance, is at most € 42,753 in 2026 (Belastingdienst, life insurance figures 2026).
- Donations. An ordinary donation to a charity with ANBI status is deductible above 1% of your threshold income, with a minimum of € 60, and up to 10% (Belastingdienst, deducting donations). A periodic donation, set down for at least 5 years, has no threshold (Belastingdienst, periodic donations).
- Gifts. In 2026 parents may give a child € 6,908 tax-free, and anyone may give someone else € 2,769 (Belastingdienst, tax-free gifts 2026). That exemption applies per year. What you do not use in 2026 does not carry over.
Does it help to pay costs in advance before the turn of the year?
Usually not. You deduct costs in the year in which your business benefits from them, not in the year you pay. The tax authority gives prepaid rent, insurance premiums and interest as examples, and an advertising campaign you pay for 3 years in one go (Belastingdienst, spreading costs).
So if you pay the insurance on your van for 2027 in December, that cost belongs to 2027. What does help: booking costs that really belong to 2026 in 2026. Think of the invoice for December's scaffolding hire that only arrives in January.
Also look at business gifts. If you give a customer or business contact more than € 227 in gifts in a year, excluding VAT, you must repay the VAT you deducted on them (Belastingdienst, threshold for business gifts).
What do you arrange for your staff before the end of the year?
Three things: the free allowance under the work-related costs scheme, leave hours and fixed-term contracts that are ending. The free allowance is the amount you may give your staff tax-free each year, for example a Christmas hamper or gift voucher. In 2026 it is 2% of your total taxable wage bill up to and including € 400,000, and 1.18% on the excess (Belastingdienst, payroll tax rates 2026).
A worked example. An installation business with a wage bill of € 300,000 has € 6,000 of free allowance. If it spends € 7,000 on Christmas hampers, a staff outing and other extras, it pays an 80% final levy on € 1,000: € 800. You declare that final levy at the latest in the return for the 2nd period of the following year (Ondernemersplein, work-related costs scheme). Unused room lapses. From 1 January 2027 the free allowance up to € 400,000 rises to 2.16%. That is already fixed (Government of the Netherlands, work-related costs scheme).
Leave hours. Statutory holiday days remain valid for 6 months after the year in which they were built up. So days from 2026 lapse on 1 July 2027 (Ondernemersplein, holiday rights). Extra days above the statutory minimum only lapse after 5 years (Rijksoverheid, taking holiday). List the balance per employee in December. Outstanding hours are a debt to your staff.
Contracts that are ending. If a fixed-term contract of six months or longer is ending, you tell the employee in writing at the latest 1 month before the end whether it will be renewed. If you do not, or do so late, you pay compensation (Ondernemersplein, notice period). So for a contract ending on 31 January 2027, you give notice by 31 December at the latest.
What do you arrange as an owner-director before 31 December?
Check your salary, your debt to the company and whether you want to pay a dividend. As an owner-director (someone with at least 5% of the shares who also works in the company) you must receive a customary salary in 2026 of at least the highest of three amounts. They are the salary from the most comparable job, the salary of the best-paid employee and € 58,000 (Belastingdienst, salary and substantial interest). Why many owner-directors end up exactly at that minimum is explained in this article on the customary salary.
Current account. If you, alone or with your tax partner, have borrowed more than € 500,000 from your company on 31 December 2026, the excess is taxed in box 2. Debts for your own home do not count (Belastingdienst, substantial interest 2026). It is the position on that single day that counts. If you are above the limit, you can repay before the turn of the year, or pay a dividend and repay with it.
Dividend. Income from your company falls in box 2. In 2026 you pay 24.5% up to € 68,843 and 31% above that (Belastingdienst, substantial interest 2026). The company withholds 15% dividend tax (Belastingdienst, dividend tax) and files and pays within 1 month of the distribution (Belastingdienst, dividend tax return). You later offset that dividend tax in your income tax return.
Which deadlines follow in the first quarter of 2027?
After the turn of the year come the returns for December and the fourth quarter. The main ones are listed below (KVK, important dates for business owners).
| Date | What |
|---|---|
| 31 January 2027 | VAT return and payment for the 4th quarter or for December 2026. Payroll tax return for December. |
| 1 March 2027 | Start of the income tax return for 2026. |
| 31 March 2027 | VAT for February, or for all of 2026 for annual filers. With monthly payroll returns also the return for February, the 2nd period, with the work-related costs final levy for 2026. |
| 1 May 2027 | Income tax return for 2026 filed. |
For a private limited company the corporate income tax return for 2026 follows later: by 31 May 2027 at the latest (KVK).
Frequently asked questions about closing the year
What is the most important step in closing the year?
Reconciling the bank. If the balance in your books matches the bank statement of 31 December, every payment is included. Only then do receivables, payables and profit make sense.
Does an investment count if I order in December but pay in January?
You have invested as soon as you enter into the commitment. If the asset is in use on 31 December, it counts for 2026. If it is not yet in use, you get the allowance up to the amount you have already paid (Belastingdienst).
May I still pay annuity premiums for 2026 in January?
No. You deduct premiums in the year you pay them (Belastingdienst). A longer deadline only applies to converting an old-age reserve or cessation profit.
Is a Christmas hamper for my staff taxed?
Not as long as it fits within the free allowance together with other extras. If you go over, you pay an 80% final levy on the excess (Ondernemersplein).
What should I do differently in 2027?
Plan with a self-employed deduction of € 900 and a free allowance of 2.16%. Those are fixed. The lower starter's deduction is a proposal in the 2027 Tax Plan and only applies once both houses of parliament agree.
Sources
- Belastingdienst, VAT refund for uncollectable receivables, accessed 16 October 2026. belastingdienst.nl
- Wet inkomstenbelasting 2001 (Income Tax Act), article 3.29b, in force in 2026. wetten.overheid.nl
- Belastingdienst, Small-scale investment allowance table 2026, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Small-scale investment allowance (KIA), accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Conditions for investment schemes, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Disinvestment addition, accessed 16 October 2026. belastingdienst.nl
- Zwick, E. & Mahon, J. (2017). Tax policy and heterogeneous investment behavior. American Economic Review, 107(1), 217-248. doi.org
- Belastingdienst, Entrepreneur's allowance and investment allowance 2026 (return guidance), accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Hours criterion conditions, accessed 16 October 2026. belastingdienst.nl
- Ondernemersplein, Self-employed deduction reduced further, accessed 16 October 2026. ondernemersplein.overheid.nl
- KVK, Tax plans 2027 for sole traders and partnerships, updated 15 September 2026. kvk.nl
- Belastingdienst, Deducting annuity premiums, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Overview of life insurance figures as of 1 January 2026. belastingdienst.nl
- Belastingdienst, How much can you deduct? (donations), accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Periodic and ordinary donations, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Up to what amount is a gift tax-free in 2026?, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Costs you must deduct spread over several years, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Threshold for staff facilities, gifts and business gifts, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Payroll tax rates, amounts and percentages from 1 January 2026, 19 January 2026. belastingdienst.nl
- Ondernemersplein, Work-related costs scheme: allowances for your staff, accessed 16 October 2026. ondernemersplein.overheid.nl
- KVK, These are the government's plans for your business, 15 September 2026. kvk.nl
- Ondernemersplein, Holiday entitlement for employees, accessed 16 October 2026. ondernemersplein.overheid.nl
- Rijksoverheid, How can I take my holiday days?, accessed 16 October 2026. rijksoverheid.nl
- Ondernemersplein, Notice period for fixed-term contracts, accessed 16 October 2026. ondernemersplein.overheid.nl
- Belastingdienst, Salary and substantial interest, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Substantial interest 2026 (return guidance), accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Dividend tax when you pay a dividend, accessed 16 October 2026. belastingdienst.nl
- Belastingdienst, Dividend tax: filing and paying, accessed 16 October 2026. belastingdienst.nl
- KVK, Important dates for business owners, updated 1 October 2026. kvk.nl
- Government of the Netherlands, How do I use the work-related costs scheme (WKR) as an employer?, accessed 17 October 2026. rijksoverheid.nl