Expenses of sole proprietors
- A person is allowed to deduct from his or her business income the expenses incurred in relation to business, only if this person is entered in the commercial register as a sole proprietor. Also notaries, bailiffs and sworn translators have the right to deduct their expenses.
- All certified expenses incurred in relation to business are deducted from the business income, when the connection of expenses with business is clearly justified. If the expenses incurred are only partly related to business, only the proportion of expenses related to business may be deducted from the business income. Expenses are related to business if they have been made for deriving business income subject to taxation or the expenses are necessary or appropriate for maintaining or developing such business.
Additional deductions on income received from transfer of agricultural products or timber
After the allowed deductions, a sole proprietor may additionally deduct up to 2877 euros a year from his or her income received from the transfer of unprocessed self-produced agricultural products (line 7 of the form E). Besides, the owners of wooded real estates who are entered in the commercial register as sole proprietors, may additionally deduct up to 2877 euros from the income derived from the sale of timber (line 8 of the form 5).
Increased basic exemption may be taken into account within the range of a particular type of income. If a person is engaged in different lines of business, e.g. sale of timber and of agricultural products, he or she should have separate calculations of income and expenses concerning the sale of timber and separate calculations on the sale of agricultural products.
If the net income received for the sale of timber is smaller (e.g. 15000 euros) than the maximum amount of the additional deduction (2877 euros), then the part of income not deducted (1377 euros) cannot be taken into account in reduction in the yield of the agricultural income.
Sale of chopped firewood is not deemed to be transfer of timber.