How do you estimate your business’ earnings?

A business’ result is the total sum of turnover, i.e. all sales, and other income of the business (e.g. threshold relief for the previous year), minus the sum of all business expenses. The totals are always calculated without VAT.

The result of your business is taxed as income taxation and added to any other income you may have earned, for example from wage work. If you pay too much tax in prepayments or through wage work, you will get a tax refund for the excess. Similarly, if you have paid too little tax for the year, the Tax Administration will send you back taxes. Back taxes must be paid with interest.

The final tax assessment is prepared by the Tax Administration, which determines whether enough taxes have been paid. The final tax assessment is completed in the summer.

Example

Business’ estimated income for the whole year (VAT 0%):

Business’ estimated turnover in 2024: €8,000

Previous year's threshold relief to be paid in 2024: €500

Business’ total estimated income: €8,500

Business’ estimated expenses for the whole year (0% VAT):

Expenses (e.g. cellphone, computer, marketing): €1,300

Home office deduction: €460

Kilometer and per diem allowances: €800

Estimated total business expenditure: €2,560

Business’ result: Income - expenses = result
€8,500 – €2,560 = €5,940

Business’ final taxable result: Income €8,500 - expenses €2,560 = result €5,940.

I received an invoice for prepayments, can I appeal it?

If you want to modify your 2024 prepayment invoices, please inform the Tax Administration of your estimated taxable result, in which case the prepayment invoices should be modified to better reflect the result.

If you estimate that you will receive income mainly at the end of the year, you can declare your result as €0 at the beginning of the year. At the end of the year, you can declare a new result in MyTax and receive new prepayment invoices.

Please note that taxation is extensive, and that it is difficult to estimate the final taxable result perfectly.