Key takeaways
- An expense is deductible only if it meets the three conditions of article 49 of the CIR 1992: a link to the activity, the taxable period, and proof.
- Some expenses are only partly deductible: 69% for restaurants, 50% for receptions and business gifts.
- A mixed-use asset is deductible only for its professional share, which must be reasonable and justified.
- The self-employed choose between a legal flat rate (a capped percentage of gross income) and actual costs, which only win when they exceed the flat rate.
Deductible business expenses, a lever to handle with method
Every euro of deductible business expenses lowers a self-employed person's taxable base, and so the tax due. The stake is real, but it is not won on the volume of spending: it is won on the proof. The tax authority rarely disputes that an expense was incurred; it disputes its link to the activity and the quality of the evidence.
The rule sits in article 49 of the Income Tax Code 1992 (CIR 1992). That article sets the general conditions of deductibility, the same for every taxpayer. Alongside it, article 53 of the same code lists the expenses that are non-deductible or capped. This article explains what you can deduct, on what conditions, and where the ceilings to know are.
The three conditions of article 49 of the CIR 1992
To be deductible, an expense must meet three cumulative conditions. If even one is missing, the deduction is refused.
What article 49 requires of each expense
A link to the activity
The expense must be made or incurred to acquire or keep taxable professional income.
The right period
It must be made or incurred during the taxable period concerned, meaning paid or turned into a certain, booked liability.
Proof
Its reality and its amount must be backed by supporting documents: an invoice, a receipt, a contract.
The first condition rules out private spending. A family meal, everyday clothing, a personal subscription: none of these serves to produce professional income, so none is deductible. The line between private and professional is the most frequent audit ground.
The third condition is why rigorous invoicing matters as much on the purchase side as on sales. Without a supporting document in the business's name, a genuine expense becomes indefensible.
Deductible at 100%, in part, or not at all
Not all business expenses are deducted at the same rate. The CIR 1992 draws three regimes: full deduction, capped partial deduction, and exclusion. The table below places the most common cases.
| Tax deductibility | |
|---|---|
| Supplies, professional rent, fees, business insurance | 100% |
| Business restaurant costs | 69% |
| Reception costs and business gifts | 50% |
| Private spending, criminal fines | 0% |
Two ceilings come up constantly. Business restaurant costs are 69% deductible (article 53, 8°bis of the CIR 1992): the remaining 31% is excluded. Reception costs and business gifts are capped at 50% (article 53, 8°). For each, the professional link must be shown, failing which the deduction falls away entirely.
Do not confuse the income-tax deduction with recovering VAT: these are two separate regimes. Some expenses deductible for income tax give no right to deduct VAT, as our guide on non-deductible VAT in Belgium sets out.
Mixed expenses: deduct only the professional share
Many outlays serve both private life and the activity: the phone, the computer, the heating of a home office, the car. For these mixed expenses, only the professional portion is deductible. You must set a reasonable split, for instance 60% professional and 40% private for a smartphone, and be able to justify it in an audit.
The car is the most sensitive case. The deductibility of vehicle costs depends on a formula linked to CO₂ emissions and the engine type, and a reform is gradually cutting the share for combustion-engine cars. The detailed rules are in our article on VAT and the company car.
Keep your expense receipts in one place
YouInv centralises your purchase invoices and expenses so that every deductible cost is documented when the audit comes.
The legal flat rate or actual costs: the self-employed choice
Contrary to a common belief, the self-employed are not shut out of the legal flat-rate expense allowance. The tax authority applies a flat rate, a capped percentage of gross professional income, when no actual costs are declared. Actual costs become worthwhile only when they exceed that flat rate, which is common as soon as the activity involves real spending.
The choice is made per income category and per year. If you opt for actual costs, each must be backed by a document: an expense without proof is a lost expense. Filing purchase invoices as they come, rather than in a rush before the return, turns that choice into a real tax saving.
Further reading
- Simplified bookkeeping for very small businesses: the self-employed person's basic accounting framework.
- Non-deductible VAT in Belgium: why an expense deductible for income tax is not always deductible for VAT.
- Depreciation of fixed assets: how to deduct an investment spread over time.
The reference source prevails: article 49 of the Income Tax Code 1992 and the guidance of the FPS Finance.
What is a deductible business expense?
It is an outlay a self-employed person can subtract from taxable income because it serves the business. Article 49 of the Income Tax Code 1992 sets the conditions: the expense must be made to acquire or keep taxable income, incurred during the taxable period, and its reality and amount must be backed by supporting documents.
What are the conditions of article 49 of the CIR 1992?
Three cumulative conditions: the expense must aim to acquire or keep taxable professional income, be made or incurred during the taxable period, and both its reality and its amount must be backed by supporting documents. A private expense, or one unrelated to the activity, is not deductible.
Are restaurant costs deductible for a self-employed person?
Only in part. Business restaurant costs are 69% deductible under article 53, 8°bis of the CIR 1992; the remaining 31% is not. The professional purpose of the meal must be demonstrable, for example by noting who you met and the reason for the meeting.
Are mixed private and professional expenses deductible?
Yes, but only for their professional share. For a good or service in mixed use, such as a phone or a vehicle, only the portion used for professional purposes is deductible. That split must be reasonable and justifiable.
Can a self-employed person deduct a flat-rate expense allowance?
Yes. A legal flat-rate expense allowance also applies to the self-employed: a capped percentage of gross income, applied automatically when no actual costs are declared. The self-employed choose, per income category and per year, between that flat rate and their actual costs, which are worthwhile only when they exceed the flat rate.
